GTCO | Guaranty Trust Holding Q1'23 Company Update : Balance sheet de-risking to support earnings

    The management of Guaranty Trust Holding Company (GTCO) has revealed a target FY'24 PBT of N806.0 billion, which represents a possible 32.3% increase from the FY'23 level. It also aims to raise net-interest margin (NIM) to 11.0% from 7.9% in FY'23. During its recent investors' call, management explained that it would attempt to achieve the set targets via the following:

    1. A sturdy 30.0% loan growth that will ride on the back of the de-risking exercises in FY'23, which opened up opportunities for high-quality risk creation adjusted for the bank's risk appetite.
    2. Strong growth in earning asset base aided by a capital injection of N500 billion, which will simultaneously help it meet the new CBN's capital requirement for international banks.
    3. Plans to leverage the elevated interest-rate environment to channel interest-earning funds from (1) and (2) towards high-quality investments that could potentially boost NIM to 11.0%
    4. Decision to take advantage of possible FX revaluation gains that may arise from the bank's stock of N800 billion dollar-dominated equity investment and
    5. Drive to ensure optimal operational efficiency with modest growth in cost-to-income ratio to 40.0% (vs 29.1% in FY23)  


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