GTCO Delivers Resilient Q1 2025 Earnings Amid Non-Recurring Fair Value Headwinds

WA
WaneInvestmentHouse
Community Contributor
Published
28 Mar 25
Updated
04 Jul 25
WaneInvestmentHouse's Fair Value
₦78.33
19.7% overvalued intrinsic discount
04 Jul
₦93.80
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Author's Valuation

₦78.3

19.7% overvalued intrinsic discount

WaneInvestmentHouse's Fair Value

Last Update04 Jul 25

Subject: GTCO’s $100M Equity Offering on LSE Signals Strategic Leap in Recapitalisation and Global Visibility

Guaranty Trust Holding Company Plc (GTCO) is taking a transformative step in its capital market journey with a planned $100 million fully marketed equity offering on the London Stock Exchange (LSE). The move supports the group’s recapitalisation strategy and reinforces its ambition to position as a globally competitive African financial services powerhouse.

Key Highlights

🔹 Strategic Recapitalisation Drive The offering is central to GTCO’s plan to meet the Central Bank of Nigeria’s (CBN) new N500 billion minimum capital requirement for international commercial banks. The net proceeds will recapitalise Guaranty Trust Bank Nigeria, boost its loan portfolio across retail, SME, and institutional banking, and fund upgrades in IT infrastructure, branch expansion, and strategic acquisitions in asset management and pensions.

🔹 Transition from GDR to Full LSE Listing GTCO will transition from its Global Depositary Receipts (GDRs) to a full listing of its ordinary shares on the LSE’s main market, with trading expected to commence on July 9, 2025 under the ticker “GTHC”. This transition aims to increase stock liquidity, attract a broader international investor base, and facilitate future global capital raising. The GDR listing will be cancelled by July 31, 2025.

🔹 Robust Financials Underpin Capital Raise GTCO enters this capital raise from a position of strength:

  • Profit After Tax surged 61% YoY to ₦258 billion in Q1 2025 (excluding fair value gains).
  • ROAE stood at 36.3%, reinforcing earnings efficiency.
  • Loan book expanded by 15.5% to ₦3.2 trillion.
  • Customer deposits rose by 8.6% to ₦11.3 trillion.
  • Asset quality improved, with NPL ratio down to 4.5% and coverage ratio at 146.9%.

🔹 Global Backing and Coordination Citigroup Global Markets Limited is acting as the sole global coordinator and bookrunner for the offering, bringing world-class expertise to the transaction.

Implications for Investors

GTCO’s full LSE listing positions it among the few Nigerian firms with dual listings on major international bourses. This not only diversifies its investor base but also opens access to deeper capital pools, enhancing its resilience and long-term funding capabilities.

For shareholders, the move signals renewed focus on global growth, regulatory compliance, and aggressive execution of strategic priorities. It also underscores the company’s history of being a market trailblazer—this time, by integrating global visibility with domestic strength.

Final Take

GTCO’s capital raise is more than a recapitalisation effort—it’s a bold declaration of intent to lead Africa’s banking sector into a new era of cross-border competitiveness. By aligning strong fundamentals with international market access, GTCO is setting itself up as a model for what African financial services can achieve on the global stage.Subject: GTCO’s $100M Equity Offering on LSE Signals Strategic Leap in Recapitalisation and Global Visibility

Guaranty Trust Holding Company Plc (GTCO) is taking a transformative step in its capital market journey with a planned $100 million fully marketed equity offering on the London Stock Exchange (LSE). The move supports the group’s recapitalisation strategy and reinforces its ambition to position as a globally competitive African financial services powerhouse.

Key Highlights

🔹 Strategic Recapitalisation Drive The offering is central to GTCO’s plan to meet the Central Bank of Nigeria’s (CBN) new N500 billion minimum capital requirement for international commercial banks. The net proceeds will recapitalise Guaranty Trust Bank Nigeria, boost its loan portfolio across retail, SME, and institutional banking, and fund upgrades in IT infrastructure, branch expansion, and strategic acquisitions in asset management and pensions.

🔹 Transition from GDR to Full LSE Listing GTCO will transition from its Global Depositary Receipts (GDRs) to a full listing of its ordinary shares on the LSE’s main market, with trading expected to commence on July 9, 2025 under the ticker “GTHC”. This transition aims to increase stock liquidity, attract a broader international investor base, and facilitate future global capital raising. The GDR listing will be cancelled by July 31, 2025.

🔹 Robust Financials Underpin Capital Raise GTCO enters this capital raise from a position of strength:

  • Profit After Tax surged 61% YoY to ₦258 billion in Q1 2025 (excluding fair value gains).
  • ROAE stood at 36.3%, reinforcing earnings efficiency.
  • Loan book expanded by 15.5% to ₦3.2 trillion.
  • Customer deposits rose by 8.6% to ₦11.3 trillion.
  • Asset quality improved, with NPL ratio down to 4.5% and coverage ratio at 146.9%.

🔹 Global Backing and Coordination Citigroup Global Markets Limited is acting as the sole global coordinator and bookrunner for the offering, bringing world-class expertise to the transaction.

Implications for Investors

GTCO’s full LSE listing positions it among the few Nigerian firms with dual listings on major international bourses. This not only diversifies its investor base but also opens access to deeper capital pools, enhancing its resilience and long-term funding capabilities.

For shareholders, the move signals renewed focus on global growth, regulatory compliance, and aggressive execution of strategic priorities. It also underscores the company’s history of being a market trailblazer—this time, by integrating global visibility with domestic strength.

Final Take

GTCO’s capital raise is more than a recapitalisation effort—it’s a bold declaration of intent to lead Africa’s banking sector into a new era of cross-border competitiveness. By aligning strong fundamentals with international market access, GTCO is setting itself up as a model for what African financial services can achieve on the global stage.

Guaranty Trust Holding Company Plc (GTCO) has reaffirmed its status as a leader in the Nigerian financial services sector, reporting a robust ₦300.4 billion profit before tax for the first quarter ended March 31, 2025. The result underscores strong core operating performance despite the absence of the ₦331.6 billion fair value gain that bolstered Q1 2024 earnings.

🔑 Key Highlights: Q1 2025 Performance

  • Profit Before Tax: ₦300.4bn
  • Interest Income: Up 41.1% YoY
  • Fee & Commission Income: Up 41.2% YoY
  • Net Loans: ₦3.22tn (↑15.6% from ₦2.79tn as of Dec 2024)
  • Customer Deposits: ₦11.20tn (↑7.7% from ₦10.40tn)
  • Total Assets: ₦15.9tn
  • Shareholders' Funds: ₦3.0tn

📉 Improved Risk Metrics and Balance Sheet Strength

GTCO’s performance also reflects improved asset quality and risk management:

  • IFRS 9 Stage 3 Loans:
    • Group level: ↓ to 4.5% (from 5.2%)
    • Bank level: ↓ to 3.3% (from 3.5%)
  • Cost of Risk: ↓ sharply to 0.4% (from 4.9%)
  • Capital Adequacy Ratio (CAR): 34.6% — well above regulatory minimum
  • Cost-to-Income Ratio: A lean 29.0%
  • Pre-tax Return on Average Equity: 42.2%
  • Return on Average Assets: 7.8%

🧠 Strategic Insight and Outlook

Despite the non-recurrence of last year’s exceptional fair value gain, GTCO’s earnings strength in Q1 2025 was driven by:

  • Broad-based income growth
  • Diversified revenue streams
  • Tight operational discipline
  • Strong capital buffers

CEO Segun Agbaje emphasized confidence in GTCO’s strategic direction, stating:

“At this pace, the Group is well-positioned to deliver the full-year PBT of 2024 at the very minimum by the end of the 2025 financial year.”

📌 Investor Takeaway

GTCO's Q1 2025 results confirm a resilient and fundamentally sound banking franchise, characterized by:

  • High capital adequacy
  • Low risk exposure
  • Strong revenue and loan growth
  • Disciplined cost control

Conclusion: GTCO remains one of the most profitable and well-managed financial institutions in Nigeria. With its robust return metrics, expanding loan book, and solid deposit base, the company is positioned to outperform in 2025 — even in the absence of extraordinary income events. Investors should take note of GTCO's sustainable earnings quality and capital strength as key differentiators in the banking sector.

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Disclaimer

The user WaneInvestmentHouse holds no position in NGSE:GTCO. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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