Wednesday, March 06, 2019 04:19 PM /NSE
FBNQuest – Initial Reaction
GT Bank’s 2018 PBT of N215.0bn came in well ahead of management’s guidance of N205.0bn and consensus 2018 PBT forecast of N213bn. PBT also beat our 2018 forecast of c.N210bn. Consequently, we expect to see slight upward revisions to consensus 2019E earnings forecasts and a positive reaction by the market.
PBT was up 8% y/y driven by declines of -17% y/y and -29% y/y in provisions and opex respectively. The results imply cost-of-risk and cost-to-income ratios of 0.4% and 37% respectively - or the best set of efficiency ratios amongst our coverage universe. The bank’s PAT also translates to a healthy ROAE of 31.7%.
Funding income fell by -9% y/y and missed our forecast by 4%, reflecting lower yields on earnings assets and elevated funding costs
The bank has proposed a dividend of N2.45 per share which is around 2% higher than our N2.40 forecast and implies a yield of 6.5%.
Year-to-date, GT Bank shares have outperformed the index. The shares have gained +10.0% compared with +2.2% for the NSE ASI.
We rate GT Bank Outperform. Our estimates are under review.
GT Bank Q4 2018 results: actual vs. FBNQuest Capital Research estimates (N millions)