Guaranty Trust HoldCo Q2 2025 – Cost Management and Loan Growth Sustains BUY Recommendation

Event

GT HoldCo’s second quarter results marked a sharp reset from last year’s exceptional performance. Profit after tax fell by 57% year-on-year to N190.98bn from N448.55bn in Q2 2024, as the Group’s non-interest income normalised following the absence of one-off FX and derivative gains that had inflated prior results. With unrealised FX gains down 93% and derivative income erased entirely, the Naira’s appreciation turned last year’s tailwind into a temporary drag.

Outlook

Consequently, we raised our fair value estimate to N108.05 from N87.70, translating to a justified P/E of 4.22x and P/B of 1.13x. Based on the today’s market close price of N93.25, this implies a potential total return of 25%, inclusive of a 9% dividend yield. We project a total dividend of N8.50 for FY 2025, which includes the N1.00 interim dividend already declared. Despite the significant rally in the share price since our last report, we maintain our BUY recommendation on the stock.

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