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GTCO’s third-quarter pre-tax profit down by 9.2% to N152bn

…share price down 11.6% year-to-date

In the third quarter (Q3) ended September 30, 2021, Guaranty Trust Holding Company Plc (GTCO), the holding company for Guaranty Trust Bank Limited posted profit before tax (PBT) of N151.91billion, which represents 9.22 percent decline from N167.35billion in the corresponding third-quarter period of 2020. Basic earnings per share (EPS) decreased to N4.54 in Q3’21 from N5.02 in Q3’20.

The result at the Nigerian Exchange Limited (NGX) shows GTCO interest income declined by 19percent to N178billion, from N220billion in the same Q3 period of 2020.

Profit after tax (PAT) in the review period also decreased by 9.05percent to N129.4billion, from N142.28billion in Q3’2020. The company’s share price currently stands at N28:50kobo. The company’s share price has decreased by 11.6percent year-to-date (YtD).

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“The results were slightly disappointing overall”, Ope Ani, senior analyst at Coronation Research said in a recent note titled “Weak funded income pressures earnings” following the released results of GTCO. Though, still maintaining their BUY rating for GTCO stocks amid their Target Price (TP) of N36.63, Coronation research analyst said they expect a neutral-to-negative reaction in the stock market.

“Following the release of the quarter-two (Q2) results, we noted that the pass-through of rising interest rates on customer loans might become more evident in the Q3 numbers, potentially buoying Net Interest Income.

“In line with our expectations, solid loan growth and the re-pricing positively impacted Net Interest Income which increased by 2.3percent quarter-on-quarter (q/q) in Q3. In Q4, stable Interest rates are likely to result in further growth in Net Interest Income. Accordingly, we maintain our BUY recommendation on the stock”, Coronation analysts said.

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