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GTCO Sinks by 27% Over Rapid Selloffs

Guaranty Trust Holdings Company (GTCO) Plc has lost more than 27% of its market value in the last seven trading sessions in the stock market. This happened as investors continued to exit their positions even though the financial services group posted large earnings in 2023.

According to market data from the local bourse, GTCO is no longer among the top market movers on the Nigerian Exchange, having bumped below N1 trillion in market value.

The latest selloffs suggest investors have negative sentiments, as the group would require significant capital raise to meet its capital base demand from the Central Bank of Nigeria (CBN).

Analysts believe that the exclusion of retained earnings from the new capital requirement could affect some lenders’ ability to meet the target. 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.

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