…Stock holds upside potential on strong earnings
Recently, Guaranty Trust Holding Company Plc (GTCO) released its audited consolidated and separate financial statements for the year ended December 31, 2024.
The results released to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE) show GTCO continues to lead in key profitability metrics and financial performance.
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FY’24 profit surpasses N1trillion…
GTCO reported profit before tax (PBT) of N1.266trilion for the year ended December 31, 2024, representing an increase of 107.8 percent over N609.3billion recorded in the corresponding year ended December 2023.
GTCO is a non-operating financial holding company, and its subsidiaries handle Banking, Payments, Pension Fund Administration and Asset Management.
Its gross earnings rose by 81.07 percent from N1.186 trillion in 2023 to N2.148 trillion in 2024. Profit After Tax (PAT) as increased by 88.60 percent, from N539.65billion in 2023 to N1.017trillion in 2024. Earnings Per Share (EPS) increased by 24.24 percent, from N19.07 in 2023 to N35.44 in 2024 financial year.
“This performance reflects not just strong earnings but also the quality and sustainability of our earnings, underpinned by a well-diversified revenue base, robust risk management practice, and disciplined capital management.
The Group recorded growth across all financial and non-financial metrics, and continues to maintain a well-structured, healthy, and diversified balance sheet,” GTCO noted.
The Group’s loan book (net) increased by 12.3 percent from N2.48trillion in December 2023 to N2.79trillion in December 2024, while deposit liabilities grew by 37.8 percent from N7.55trillion to N10.40trillion during the same period.
Overall, the GTCO continues to post one of the best metrics in the Nigerian financial services industry in terms of key financial ratios that is: Pre-Tax Return on Equity (ROAE) of 60.5 percent, Pre-Tax Return on Assets (ROAA) of 10.3 percent, Capital Adequacy Ratio (CAR) of 39.3 percent and Cost to Income ratio of 24.1 percent.
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Analysts target prices signal upside potential on strong earnings…
Lagos-based Coronation Research analysts in their March 28 note to investors said their price target for shares of GTCO is N70.77 per share.
“We remain optimistic about the bank’s performance in 2025, supported by its strong earnings momentum in 2024,” Coronation Research said.
“We anticipate earnings growth to be driven by an expansion in core banking revenues, with loan book growth expected to strengthen as interest rates moderate. Additionally, non-interest revenue (NIR) should play a key role in supporting overall earnings growth,” the analysts further said.
Likewise, Meristem Research analysts said in their March 28 earnings flash that “While a lower interest environment could contribute to slower earnings growth, we expect GTCO to sustain its gross earnings through loan book expansion, improved asset quality, and enhanced cost efficiency”.
“That said, non-interest income may grow at a slower pace as exchange rate stability limits foreign exchange related gains,” Meristem analysts added.
CardinalStone Research analysts in their March 28 note on GTCO financials said, “In its audited FY’24 earnings, Guaranty Trust Holding Company Plc (Target Price of N74.02) reported a strong 88.6 percent year-on-year (YoY) growth in PAT to N1trillion. “This impressive performance was driven by a 2.4x surge in net interest income (NII) and a 1.3x increase in non-interest income (NIR)”.
Here’s what the Group CEO said…
Commenting on the results, Segun Agbaje, Group Chief Executive Officer of Guaranty Trust Holding Company Plc (GTCO Plc) said; “Our strong performance for 2024 underscores the resilience and depth of our business, driven by a well-diversified earnings base across our banking and non-banking subsidiaries, all of which are P&L positive”.
“Our capacity to generate sustainable high-quality earnings, maintain strong asset quality, and drive cost efficiencies reflects the soundness of our long-term strategy and disciplined execution. We have also prudently provided for all our forbearance loans, well ahead of the June 2025 timeline, whilst fully accruing for the windfall tax, further strengthening our balance sheet and enhancing financial resilience,” Agbaje said.
He further added; “The total dividend of N8.03kobo for the 2024 FYE is underpinned by the quality of our earnings and is in line with our long tradition of increasing dividend pay-out year-on year. Looking ahead, we remain committed to building a Financial Services Group that thrives on innovation, operational efficiency, and sustainable profitability. We will continue to deepen our relationships with customers, leverage technology to deliver cutting-edge financial solutions, and accelerate the growth of all our business verticals—Banking, Funds Management, Pension, and Payments—to unlock new opportunities and create more value for our shareholders.”
Optimal corporate governance practices…
GTCO said it remains unwavering in its commitment to executing its strategic vision of being a resilient and innovative company by integrating robust corporate governance principles into every part of its structure.
The company said it recognises that “adherence to optimal corporate governance practices is vital for the Group’s long-term sustainability.”
Its tradition is to focus on creating enduring value for shareholders while fostering an environment that encourages corporate prosperity. It also thrives on good governance practices, which has bolstered the trust of its shareholders, clients, business partners, employees, and the wider financial community, alongside a broad array of stakeholders.
Total dividend of N8.03kobo for year 2024…
GTCO proposed final dividend of N7.03 kobo which will be paid to shareholders whose names appear in the register of members as at close of business on April 15, bringing the total dividend paid for the 2024 financial year to N8.03. The stock rose to N68 per share as at Friday April 11, approaching its 52-week high of N70 as against 52-week low of N32.35. The stock has risen by about 17 percent this year. GTCO will hold its fourth Annual General Meeting on April 24, 2025.
Strong capital adequacy ratio…
GTCO Plc total assets and shareholders’ funds closed 2024 financial year at N14.8trillion and N2.7trillion, respectively. GTCO’s Capital Adequacy Ratio (CAR) remained very robust and strong, closing at 39.3 percent in 2024. Likewise, its asset quality was sustained as evidenced by IFRS 9 Stage 3 Loans which closed at 3.5 percent at Bank Level and 5.2 percent at Group in December 2024 (2023: Bank, 2.5 percent; Group, 4.2 percent) and cost of risk (COR) closed at 4.9 percent from 4.5 percent in December 2023.
Raises N209billion in first phase of equity capital programme…
Guaranty Trust Holding Company Plc successfully completed the first tranche of its equity capital raise programme, following the end of the capital verification exercise by the Central Bank of Nigeria (CBN) and the approval of the Basis of Allotment of the Offer by the Securities and Exchange Commission (SEC).
The offer, which garnered substantial interest from domestic retail investors, raised a total of N209.41 billion from 130,617 valid applications for 4,705,800,290 ordinary shares, fully allotted.
This milestone concludes the first phase of GTCO’s phased equity capital raise programme, which is structured on a balanced allocation strategy based on an equal split between institutional and retail investors. This balanced approach aligns with GTCO Plc’s commitment to fostering a well-diversified and robust investor base.
