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It has been a challenging 2022 for Nigerian bank stocks Year-to-date; the sector index has returned a disappointing 7.4% and has grossly underperformed the broader equity gauge (NGX ASI: +24.3%).  However, GTCO appears to .be worse hit among the top banks; its stock market performance in recent time has remained highly miserable leading to harvest of loses for its investors.  

GTCO closed its last trading day (Tuesday, May 17, 2022) at 23.90 NGN per share on the Nigerian Stock Exchange (NGX), recording a 0.2% drop from its previous closing price of 23.95 NGN.  It began the year with a share price of 26.00 NGN but has since lost 8.08% off that price valuation, ranking it 131st on the NGX in terms of year-to-date  : GTCO underperformed the Nigerian Banking industry which returned 12.6%   and  the market which returned 28.8% over the past year. It has lost 21.22% in the last three years and 25.16% in the last five years

The reason behind GTCO  miserable equity  performance may not far to seek. Although  Q1 22 was a decent quarter in terms of earnings for  some  banks ,from the four of the five banks that published results , GTCO  is the only one that surprisingly reported an EPS decline. .

Investor reaction to the banks’ Q1 22 results has been largely neutral and the reason for this is connected with lethargic  average gain in EPS as in the case GTCO which is very below inflation at 15.9%. 

Price History & Performance

Summary of all time highs, changes and price drops for Guaranty Trust Holding
Historical stock prices
Current Share Price₦23.95
52 Week High₦30.00
52 Week Low₦21.45
1 Month Change-2.25%
3 Month Change-8.94%
1 Year Change-18.81%
3 Year Change-21.22%
5 Year Change-25.16%
Change since IPO9,185.07%

 Meanwhile, this is not limited GTCO as indicated above. In the recent time , the domestic equity market has got bigger fish to fry. For instance , the price of Brent oil is sharply up (+43.4% y-t-d) and has propelled stocks like Seplat Energy (+84.6% y-t-d) to all-time-highs. In addition, palm oil prices are up sharply and have propelled stocks like Presco (+127.8% y-t-d) and Okomu Oil Palm (+51.4% y-t-d).  Also , the telcos have been performing well, and their underlying growth is looking much better than the banks at the moment. MTN Nigeria grew revenue by 22.2% y/y and EPS by 31.5% y/y in Q1 22. Moreover , the equity market now seems to be interested in some re-rates, like the Brewers, which reported better-than-expected numbers in Q1.

 Despite the above investors’ reaction to banks equities , this sector still has its own  the attraction which is as a store of value as against an EPS growth  Q1 22 was a decent quarter in terms of earnings with many players in this industry recording EPS growth  . Most of the growth across major banks analyzed was driven by increased funded income, following expansion in banks’ loan books and some upward repricing of loans. Higher yields in Q1 22 (versus Q1 21) saw banks earn higher interest on their investment securities portfolios y/y. Overall, banks’ Yields on Assets (YoA) were much improved compared with the prior year. Elsewhere, banks’ Cost of Funds faced some upward pressure: however, they were able to keep rises below the rise in asset yields. As a result, Net Interest Margins (NIM) were resilient. Non-interest revenues (NIR) also continued on their upward trajectory. 

Moreover , the narrative that the fundamentals of the banking sector are compelling has persisted, even as investor apathy around bank stocks remains. Although bank margins and profitability have come down slightly in recent years, bank stocks are believed to have been oversold. In an environment where negative inflation-adjusted yields remain the theme, bank dividends continue to offer more attractive yields than Treasury bills. In addition, with yields on the rise, we think FY 21 may have been the bottom in terms of banks’ profitability. This is the  valuations of  some  banks remain compelling and hold value for long-term investors


 Guaranty Trust Holding is the fourth most traded stock on the Nigerian Stock Exchange over the past three months (Feb 14 – May 17, 2022). GTCO has traded a total volume of 1.17 billion shares—in 24,764 deals—valued at NGN 29 billion over the period, with an average of 18.5 million traded shares per session. A volume high of 130 million was achieved on February 17th, and a low of 3.27 million on March 3rd, for the same period. The table below details the last 10 trading days of activity of Guaranty Trust Holding on the Nigerian Stock Exchange


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