What You Need To Know About GTB’s 2016 Half Year Results

Byadmin

August 21, 2016

2 min read 324 words 3 views

GT Bank Plc released its 2016 half year results revealing it a blistering pre-tax profits of N91.3 billion a 45% increase from the same period a year earlier.

Highlights of the results

Guaranty Trust Bank Plc. (GTB) released audited H1 2016 results wherein gross earnings jumped 37% YoY to N209 billion with both PBT and PAT rising 45% YoY to N91 billion and N77 billion respectively. Relative to our estimates, earnings are tracking well ahead onsizable FX revaluation gains booked in Q2 16.
In line with its practice, GTB declared an interim dividend of N0.25 per share, which translates to a 1% dividend yield.
The strong H1 earnings largely stem from N61billion FX translation gains booked during the quarter. In our report—attached, (A new dawn for the naira: Bullish or Bearish for coverage sectors), we identified GTB’s sizable net long FCY position (51% of FY 15 net assets) as positioning the bank for sizable FX translation gains following the 43% NGN depreciation in June.
Beneath the FX induced earnings gain, GTB, as with the rest of our coverage, recorded a marked upswing in loan loss charges which rose nearly ten-fold QoQ to N34billion with annualized cost of risk for the quarter at a multi-year high of 8.8%(H1 16: 4.8% FY 16E: 1%).
Despite these pressures, we think continued NGN depreciation leaves sizable scope for FX gains to more than offset pain from worsening asset quality.
GTB currently trades at P/E and P/B of 6.lx and 1.7x which are at premia to peer averages of 4.9x and 0.8x respectively. Following the results release on Thursday, the stock price rose 5.7% to N26 relative to our FVE at N23.24. Our estimates are under review.