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GTCO Plc H1 2022-Charting the Turmoil

In its recently released H1:2022 results, Guaranty Trust Holding Company Plc (GTCO) performance epitomized the prevailing macro-economic realities of the time. Although, the topline performance still came out within the double-digit growth rate as evidenced by the 15.09% YoY surge in Gross Earnings to NGN239.29bn. The bank could only muster a 2.34% YoY decline in Profit After Tax (PAT) to NGN77.56bn in the period.

While the former rode on the increases in Interest Income (+16.74%) and Fee & Commission Income (+21.41%), the later proved the offshoot of deteriorating expense lines. For context, Interest Expense (+38.43% YoY to NGN26.35bn), Fee and Commission Expenses (+369.83% YoY to NGN6.71bn) and rising Operating Expenses (+11.33% YoY to NGN99.46bn) all rose in the period. Overall, we retain our target price at NGN33.22 which represents a 68% upside from its current close price of NGN19.8. We rate GTCO a STRONG BUY

Provider
ARM Securities Limited
ARM Securities Limited

ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape. ​

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