BREAKING: GTCO mulls N500 billion in public offer

BREAKING: GTCO mulls N500 billion in public offer

Reports reaching Nairametrics suggest that GTCO, one of Nigeria’s largest banks, is exploring a capital raise of up to N525 billion.

According to a reliable source with knowledge of the matter, senior executives at the bank have identified an urgent need to raise capital in line with an expected directive from the apex bank.

Nairametrics earlier reported that the central bank wants banks to shore up their capital base in line with the government’s goal of achieving a one trillion Naira GDP.

What GTCO is Planning

According to the source, the bank is considering raising between N450 billion and N525 billion through a public offer. The proceeds from the offer will be used to bolster its share capital and provide the bank with working capital.

No date has been decided yet, as the matter is still under discussion and requires regulatory approval to proceed.
However, an announcement is imminent, according to the source. The source also revealed that the bank will be adopting a “non-dilutive” approach in the capital raise, suggesting the public offer might take the form of a rights issue.
Some insiders at the bank suggest that the capital is required as it boosts the bank’s ability to “book large ticket transactions,” which would be difficult to finance with its current balance sheet.
Meanwhile,

GTCO has the lowest asset base among the FUGAZ, with just N8.6 trillion, and is significantly dwarfed by the industry leader, Access Bank, with N21.4 trillion.
GTB also has the smallest amount of deposits and Net Assets, with N6.3 trillion and N1.2 trillion respectively, as of September 2023.
What we also know
Reports also indicate that the single obligor limits of most banks have been affected by the devaluation of the Naira, meaning they will need to shore up capital to partake in big-ticket lending.

Nairametrics analysts opine that GTCO finds itself in a position where it may have to undertake a subordinate status in transactions that it could have led.
Nairametrics reported earlier that about 96.63 million units of GTCO shares were being traded on the NGX on Monday, March 11th.
While it is not clear who the buyer is, sources inform Nairametrics that the trade was from a foreign investor., however, we are yet to confirm.
This volume thus meant GTCO shares were responsible for 23.4% of the market’s activity in terms of volume traded today.
Guaranty Trust Holding Company Plc consists of other non-banking businesses, including Payment, Funds Management, and Pension Funds Management businesses in its ecosystem.

Nairametrics reached out to the bank for confirmation, but they declined to comment.