GTCO Adds N216.32bn WoW In Market Cap
The stock price of Guaranty Trust Holdings Company Plc (GTCO) has jumped to N48.45 in one week, adding N216.32 billion in market capitalisation in its Week-on-Week performance.
The stock which rose in anticipation of the proposed plan to raise between N450 billion to N525 billion through a public offer, opened trading last Monday at N41.10 per share.
At the Nigerian Exchange Limited (NGX), GTCO with 29,431,179,224 total shares outstanding opened trading at N41.10 per share or N1.21 trillion, and gained N216.32 billion to close at N48.45 per share or N1.43 trillion as of March 15, 2024.
The stock had reached a 52-week high of N48.8 per share. Out of the total shares outstanding, 4.6153 percent or 1,358,323,537 units are GTCO GDR underlying shares.
Last year, CBN Governor, Olayemi Cardoso said while the banking sector has been stable, banks in the country were not adequately capitalised to meet the needs of a $1 trillion economy that the present government was aiming to achieve.
“Will Nigerian banks have sufficient capital relative to the finance system’s needs in servicing a $1 trillion economy shortly? In my opinion, the answer is no, unless we take action,” he said.
“Therefore, we must make tough decisions regarding capital adequacy. As a first step, the Central Bank will be directing banks to increase their capital,” Cardoso said at the 2023 Bankers’ Dinner. The apex bank chief’s statement sent waves through the banking industry, reverberating the events of 2004 when Soludo-led Central Bank in a move called banking consolidation increased bank minimum capital requirement from N2 billion to N25 billion.
Since then, several banks are actively planning to bolster their capital reserves, with some institutions already taking concrete steps to attract potential investors.
The capital raise will facilitate the enhancement of Guaranty Trust Bank’s ability to book large ticket transactions, as the effect of devaluation has impacted single obligor limits for most banks and thus their ability to book and participate in large ticket transactions.
Though GTCO had in the first half (H1) of 2023 noted that in the second half, it expects revenue streams from all its business verticals to continue to grow and further the gains in earnings diversification as the Financial Holding Structure continues to gain traction; specifically, the non-banking subsidiaries which it noted will strengthen and contribute three percent of the Group’s performance.
“We are fully committed to our vision of making end-to-end financial services easily accessible to individuals and businesses across Africa and will continue to identify opportunities for value creation by harnessing synergies within our robust financial services ecosystem. The prospect of greater profitability will enable us to further accelerate efforts towards creating better outcomes for our customers and increasing shareholder value,” Segun Agbaje, Group Chief Executive Officer, GTCO Plc said in the first half of 2023.
In its unaudited consolidated and separate financial statements for the period ended September 30, 2023, GTCO reported profit before tax (PBT) of N433.2billion, representing an increase of 155.2 percent over N169.7billion recorded in the corresponding period ended September 2022.
The Group’s loan book (net) grew by 17.7per cent from N1.89trillion recorded as of December 2022 to N2.22trillion in September 2023, while deposit liabilities increased by 37.9 percent from N4.61trillion in December 2022 to N6.36trillion in September 2023.
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