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GTCO Q1:2023 Earnings Result | Performance Bolstered by Robust Interest Income

The recently released Q1:2023 results for the Group reflected Gross Earnings advanced 32.19% YoY to NGN158.09bn due to growth in interest and non-interest income. This slightly exceeds our estimates and represents 28% of our forecasted full-year earnings of NGN569.57bn. Elsewhere, Operating Expenses grew 16.75% YoY to NGN56.37bn following a spike in AMCON charges and administrative expenses. Profit Before Tax (PBT) and Profit After Tax (PAT) grew by 36.48% YoY and 34.62% YoY to NGN74.09bn and NGN58.17bn respectively. Overall, Net Profit Margin improved slightly by 66bps to 36.79% in the period.

We have revised our target price for GTCo to NGN23.47 for 2023FY. At its current price of NGN23.05 as of 3rd May 2023, this translates to an upside prospect of 2%. Thus, we put a “NEUTRAL” rating on the stock.

Underlying
GUARANTY TRUST HLDG

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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