NEDBANK GROUP (ZA), a company active in the Money Center Banks industry, now shows a lower overall rating. The independent financial analyst theScreener just confirmed the fundamental rating of 4 stars out of 4, as well as the stock market behaviour of the title as moderately risky. However, environmental deterioration penalises the general evaluation, which is downgraded to Neutral. As of the analysis date March 1, 2022, the closing price was ZAR 221.85 and its expected value was estimated at Z...
Q3 earnings improvements boost profit outlook GTCO released its 9M’21 results yesterday, reporting a 12% y/y decline in Gross Earnings to ₦319 billion. We recall that, as at H1, the bank’s earnings were 16% weaker y/y, but a solid performance in Q3 helped cut the decline. The bank’s Loan book grew by 6% q/q to ₦1.7 trillion, while Asset yield remained stable at 7.8% for the quarter, which boosted Interest Income by 5% q/q to ₦69 billion...
GTCO recently released its H1’21 results, posting a 16% y/y decline in Gross Earnings to ₦208 billion. This came as the result of an 18% y/y decline in Interest Income to ₦126 billion, despite a 9% q/q improvement in the line item caused by a 326bps increase in yield on loans and advances. Meanwhile, Interest Expense also fell by 27% y/y, despite a 42% q/q rise in interest paid, as cost of funds rose to 1.2% from 0.8% in Q1. This meant a 16% y/y drop in Net Interest Income to ₦107 billion. On a...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
The Nigerian banking system was able to avoid widespread deterioration in asset quality – a key concern for investors apart from rising interest rates – due to the CBN’s forbearance measures. Although Covid-induced moratoriums have now expired, continued regulatory support, pick-up in economic activity and extended forbearance on intervention loans are likely to keep NPL ratios from rising substantially. Rising crude oil prices are also positive for oil and gas loans, which form a huge portio...
Nigeria’s macroeconomic picture remains bleak, with high inflation and unemployment, sub-par real GDP growth and a weakened local currency. These issues, alongside a difficult regulatory environment, have had negative implications on banks, as well as their heavily discounted valuation. In this report, we look at how the rising rate environment is a double-edged sword for Nigeria banks, as it provides the opportunity to expand NIMs, but minimises room to book large trading gains. This is part...
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Guaranty Trust Bank Plc. Global Credit Research- 23 Jun 2021. London, 23 June 2021-- Moody's Investors Service has completed a periodic review of the ratings of Guaranty Trust Bank Plc and other ratings that are associated with the same analytical unit.
GTB released its Q1 21 unaudited numbers, reporting a 9% yoy drop in net attributable profit at NGN45bn. This was below our expectations for a profit figure of NGN52bn. The earnings miss was largely due to lower-than-expected net interest income, which decreased 18% yoy. This, in turn, was due to significantly lower earnings from its debt investment securities classified as fair value through other comprehensive income (FVOCI). At the end of the quarter, the group's holding of the CBN's spec...
A director at Guaranty Trust Bank sold 315,000 shares at 32.950NGN and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years cl...
GTB released its FY 20 results, reporting a 2% yoy growth in net attributable profit to NGN200bn. The banking group's profit was above our estimate as well as Bloomberg consensus by 12% and 1%, respectively. A final dividend of NGN2.7 was declared, which was 10% higher than the previous year's figure. In terms of profitability, the group's metrics came under pressure as ROE fell 4.5ppts yoy to 27.1% and ROA by 1.0ppts to 4.6%, although it remains the most profitable bank in our coverage (aver...
2020 was a challenging year for Nigeria banks, as a mixture of a harsher regulatory climate, weak economic prospects, and an ultra-low interest rate environment weighed on financial performance. As Q4 20 earnings season (as well as FY 20) draws closer, we highlight the top factors likely to shape the numbers: 1) THE LOW YIELD ENVIRONMENT A direct outcome of the Central Bank of Nigeria (CBN)'s expansionary policy actions has been the downward pressure in net interest margins, which will be ref...
In this report, we present our general expectations for Nigeria banks in Q4 20, as well as key trends noted in the Q3 20 earnings season. KEY EXPECTATIONS FOR Q4 20 PERFORMANCE Net interest margins will remain pressured: In line with the low yield environment and the CBN’s expansionary policies, NIMs in Q4 20 will remain pressured like Q3 20, when only one bank in our coverage (Access) recorded an increase in NIM. Although, the effect of the reduction in rates on savings deposits in September...
GTB is one of our top picks in our Nigeria banks coverage (alongside Stanbic IBTC and Zenith). Its leading retail banking franchise, strong digital footprint, sustained operating efficiency and new path to building potentially lucrative non-banking businesses support our positive outlook. For Q3 20, growth in profits slowed, mainly due to lower fee and commission income and higher risk costs. Future events to watch are the bank’s transition to a holding company (holdco), new banking CEO appoi...
Bank maintains dividend payout amid mixed earnings Slide in profits occasioned by higher provisions, Opex GUARANTY released H1’20 results yesterday, reporting 3% y/y growth in Gross Earnings to ₦228.3 billion. The bank’s Net Interest Income grew 10% y/y to ₦127.6 billion thanks to a 20% moderation in Interest Expense. Meanwhile, Non-Interest Income grew by a modest 2% y/y to ₦74.6 billion, caused by a 30% decline in fees and commission...
We update our models and estimates to reflect the challenging macroeconomic backdrop from lower oil prices, the Covid 19 outbreak, the recent currency devaluations and the changing regulatory backdrop. Our ratings are unchanged, earnings forecasts are lower and TPs are higher owing to the lower rate environment. Lower earnings estimates: We forecast a 5% CAGR for earnings in FY 20f-23f for our Nigeria bank coverage, with an average ROE of 13.3%. We have cut our forecasts to reflect Nigeria’s ....
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Guaranty Trust Bank Plc. Global Credit Research- 08 Jul 2020. London, 08 July 2020-- Moody's Investors Service has completed a periodic review of the ratings of Guaranty Trust Bank Plc and other ratings that are associated with the same analytical unit.
The Central Bank of Nigeria (CBN) is at it again. It has debited 26 banks a total of NGN216.1bn, attributed to the CRR (Cash Reserve Ratio) compliance requirement. Recall that two weeks ago, the CBN debited banks cNGN459.7bn for the same purpose. This is the third CBN debit in 2020, bring the total CBN debits for the year to NGN2.08tn: 1) CRR and LDR infringements in April 2020 of NGN1.4tn; 2) another CRR debit of NGN460bn; and now 3) the most recent CRR debits of NGN216bn. CBN PENALTIES FOR ...
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