In the past seven trading sessions, Guaranty Trust Holdings Company (GTCO) Plc has seen a decline in market value of almost 27%. This occurred despite the fact that the financial services business reported high profitability in 2023 as investors kept pulling out of their investments.
With a market value that has fallen below N1 trillion, GTCO is no longer ranked among the top market movers on the Nigerian Exchange, according to market statistics from the local exchange.
Given that the company would need to raise a sizable amount of capital to satisfy the Central Bank of Nigeria’s (CBN) capital base criteria, the most recent selloffs appear to reflect unfavorable market sentiment.
Analysts predict that certain lenders may find it more difficult to reach the goal as a result of retained earnings not being included in the new capital requirement. Meanwhile, some shareholders are already apprehensive that a potential equity capital raise could dilute their interest in the bank.
Ticker: GTCO’s market value declined to about N987 billion at a unit price of N33.50, losing its most valuable brand in the financial services sector title to its immediate rival, –Zenith Bank.
GTCO has a N362 billion shortfall to meet its capital base of N500 billion required for an international banking license. Its eligible capital base, based on the Central Bank of Nigeria requirement, is N138.2 billion.
Last week, the Holdings company’s share price lost 19% in the equities market. The contraction is coming ahead of its share price mark down after dividend payment. GTCO would pay shareholders N2.70, declared as a final dividend, on May 9, 2024.
The decline in its market valuation has provided a fresh entry for new investors or existing ones to ramp up more shares in the open market. Equity analysts said the stock is now trading at a good value after the market correction. GTOC dividend payout ratio sit at a comfortable level of 17% in 2023.
