Equity Analysis /

Guaranty Trust Holding: GUARANTY TRUST BANK: Q1 18 in line – winning earnings run continues, HOLD on valuation

    Tellimer Research
    23 April 2018
    Published byTellimer Research
    Quality of earnings justifies measured growth. Guaranty Trust Bank (GTB) started the year on a positive note, with pre-tax profit up 4.4% to NGN52.6bn, in line with both our full-year estimate of NGN201.3bn and management’s guidance of NGN205bn on a run-rate basis. BVPS was down 2.5% YoY to NGN18.6 (vs FY18f NGN24.1) and annualised ROE increased by 70bp yoy to 31.2% (vs FY18f 26.0%). Modest growth in earnings due to lower provisions charge and higher FX-related income helped offset the decline in T-bill yields. Priced to perfection, we remain HOLDers as our target price of NGN44.5 gives an expected total return of 5% at the current market price.