GTCO: The Bank That Keeps Its Shirt Buttoned

Investible. Accumulate on weakness. Do not chase.

GTCO is one of the few Nigerian financial institutions where conservatism appears to be a habit rather than something discovered shortly before an emergency press conference.

It has cheap deposits, formidable capital, excellent cost control and a lending culture that generally declines invitations to every passing carnival. Around that banking franchise, it is assembling credible payments, pensions and asset-management businesses.

At a reference price of ₦130, GTCO trades at approximately 5.1 times FY2025 earnings, 1.4 times book value and a trailing dividend yield of about 9.8%.

That is not expensive. But the market has noticed the quality. GTCO is now a good business at a sensible price, not contraband being sold behind Balogun Market.

My preferred accumulation range is ₦110–₦120. Below ₦105, one should stop consulting the village oracle and check whether the fundamentals remain intact.

The moat, without PowerPoint incense

GTCO’s advantage is not mysterious technology. Nor is it the word ecosystem, now found in corporate presentations with the frequency of an “urgent 2k” request.

Its moat is built from trusted brands, low-cost deposits, disciplined underwriting, operating efficiency and the institutional memory not to lose its head during Nigerian credit booms.

Customer deposits reached roughly ₦12.9tn in 2025, against net loans of only ₦3.1tn. The resulting loan-to-deposit ratio of about 24% looks almost pathologically cautious.

Yet Nigeria is full of banks that lent enthusiastically to important men in overflowing agbada and discovered, several restructurings later, that embroidery is not collateral. This won’t be the only time you will hear me talk about agbada here. Forgive me in advance.

In ages past, onlookers hailed the particularly prosperous agbada wearer with cries of “one thousand five hundred!” It acknowledged the cost, excellent taste and status of a man carrying several yards of cloth through tropical heat without apology. Today, ₦1,500 will barely purchase a bottle of cola and Gala.

Inflation has murdered poetry. But I digress.

GTCO’s restraint protects capital. It also creates the central question: can management deploy this enormous balance sheet without eventually financing the same overflowing agbada, now reintroduced by consultants as a visionary conglomerate?

Profits fell. Earnings quality may have improved.

FY2025 gross earnings were broadly unchanged at ₦2.15tn. Profit before tax declined 2.8% to ₦1.23tn, while profit after tax fell 14.9% to ₦865.7bn. Earnings per share dropped from ₦35.44 to ₦25.43.

The hurried reading is deterioration. The more useful reading is normalisation.

GTCO’s 2024 results contained substantial foreign-exchange and fair-value gains produced during one of the naira’s periodic public disgraces. The gains were real, but they were not a franchise. In 2025, interest and fee income had to return to the mines.

• Total equity increased 24.7% to ₦3.34tn
• Customer deposits grew by more than 20%
• Net loans increased 12.4%
• Cost of risk fell from 4.9% to 2.2%
• Stage 3 loans improved modestly to 5.0%
• Capital adequacy reached 43.8%
• Cost-to-income remained excellent at 27.9%

That capital ratio is almost indecent. Some banks wear regulatory capital like borrowed agbada: magnificent from across the road, suspicious around the shoulders. GTCO’s buffer is real.

The trouble is that unused capital eventually becomes expensive furniture. It must be lent prudently, invested productively, deployed into fee-generating businesses or returned to shareholders.

Q1 2026: the descent from Olympus

First-quarter profit before tax edged up to ₦302.9bn, but profit after tax fell 15% to ₦218.1bn, partly because of a materially higher tax charge.

Interest income grew 17.5%, fee income increased 7.1% and deposits rose 6.3%. However, pre-tax return on equity declined to 34.4%, while cost-to-income increased to 31.5%.

These are still excellent figures. GTCO is merely descending from the balcony where high interest rates, inflation and currency gains had temporarily seated Nigerian banks.

As Anna Karenina might have observed, had she covered the NGX, every profitable Nigerian bank is profitable in its own peculiar way. GTCO must now prove that recurring interest and fee income can replace windfalls without costs and taxation eating the supper.

Beyond the bank

The holding-company experiment is beginning to acquire substance.

In 2025, HabariPay produced ₦13.0bn in gross earnings and ₦9.7bn in profit before tax, increases of 122% and 131%, respectively. Transaction value processed reached ₦81.1tn, nearly three times the previous year.

Fund-management assets doubled to approximately ₦1.32tn, while pension assets under management rose 46% to ₦151bn.

Promising, certainly. Transformational, not yet.

Banking still contributed roughly 98% of group profit before tax. The non-bank businesses are saplings, not the iroko forest suggested by the brochure.

Their appeal is nevertheless clear. Payments and asset management can produce recurring fee income without consuming the capital required by lending. If GTCO can scale them without smothering them beneath committees, they should improve earnings quality and eventually justify a higher valuation.

Dividend and dilution

GTCO paid a total FY2025 dividend of ₦12.76 per share, implying a yield of about 9.8% at ₦130.

That is attractive for an equity, though still below prevailing Nigerian fixed-income yields. The investment case therefore requires dividend growth, capital appreciation and some protection against inflation. A 10% dividend paid in a currency depreciating with evangelical commitment is not wealth creation. It is a polite apology.

Outstanding shares increased from approximately 29.4bn in 2023 to 36.6bn in 2025 following the capital raise.

The fundraise was principally intended to meet the CBN’s higher capital requirements and support growth, rather than repair a broken balance sheet. That distinction matters, but it does not absolve management.

The cooking pot is larger. Shareholders are entitled to ask when the soup improves on a per-share basis.

At ₦130, the midpoint of the base case implies approximately 21% capital upside, before dividends.

That is attractive in naira. The sterling or dollar return remains hostage to the currency, that familiar Nigerian uncle who arrives at Christmas and somehow leaves with the television.

What could go wrong?

• Persistent naira depreciation
• Higher taxation
• Margin compression as interest rates decline
• Hidden concentration within the corporate loan book
• Poor returns on surplus capital
• Uncertain succession, though it is fair to say the current MD has been excellent.
• Overpromising by the non-bank businesses
• Further dilution without corresponding per-share growth

GTCO’s conservatism reduces the probability of catastrophe. It does not abolish Nigeria.

Final judgment

GTCO may be the cleanest publicly traded expression of Nigerian banking quality. It has the capital of a nervous Swiss banker, the efficiency of a market woman who counts her change twice and a management culture that has generally preferred profitable restraint to theatrical expansion.

I would begin accumulating below ₦125, become more interested around ₦110–₦115, and regard prices below ₦105 as compelling if the fundamentals remain sound. Above ₦165, I would reassess whether earnings growth justifies the enthusiasm.

This is not a turnaround, moonshot or miracle performed beside the Lagos-Ibadan Expressway. It is a wager that one of Nigeria’s best financial franchises can convert inflation, payments growth and financial deepening into rising value per share without surrendering too much to the taxman, the regulator or the naira.

For once, that is not an absurd wager.