Guaranty Trust Holding Company: Weak funded income pressures earnings
Research
27 Oct 2021 · Results First Look
Guaranty Trust HoldCo (GTCO) released its 9M 21 unaudited results after trading hours on Tuesday (26 September). The group reported a Pre-tax profit decline of 9.2% y/y and a Net profit decline of 9.6% y/y in the period. However, Pre-tax profit (+2.1% y/y) and Net profit (+3.6% y/y) for Q3 21 standalone grew on a yearon-year basis.
On balance, earnings were weighed by the drop in Net Interest Income, as Interest on investment securities slumped. In our view, this is primarily attributable to the Central Bank of Nigeria's (CBN) low yield (0.5% pa) Special Bills, which made up a substantial portion (52.3%) of the group's investment securities portfolio.
We expect a neutral-to-negative reaction in the market today. The stock is down 11.9% y-t.d.