Guaranty Trust Holding Company Plc (GTCO) recently released its 9M 2022 financial results. Whilst Gross Earnings YoY growth came in at 14.38% to NGN364.31bn, the bank could only muster a 0.73% YoY increase in Profit After Tax (PAT) to NGN130.35bn in the period.
The increase recorded in Gross Earnings was spurred by the increases in Interest Income (+19.20% YoY) and Non-Interest Income (+6.76% YoY). There were however increases in expense lines. Interest Expense (+33.37% YoY to NGN42.80bn), Fee and Commission Expenses (+18.27% YoY to NGN66.94bn) and Operating Expenses (+12.69% YoY to NGN139.44bn) all rose in the period. Ultimately, Net Profit Margin for the period came in at 35.78% YoY (9M:2021, 40.63% YoY).
Overall, we retain our target price at NGN33.22, an 85% upside from its current close price of NGN18.00. We rate GTCO a STRONG BUY
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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