Trading License Holders and the investing public have been officially notified that, trading in the shares of Guaranty Trust Bank Plc (the Bank) was suspended today, Friday, 18 June 2021.
The suspension is necessary to prevent trading in the shares of the Bank in preparation for the eventual delisting of Guaranty Trust Bank Plc from the Daily Official List of the Nigerian Exchange Limited (NGX) and listing of the Holding Company, Guaranty Trust Holding Company Plc accordingly.
Please understand that holding company status is not new amongst Nigerian banks. Recall that in 2011 the Central Bank of Nigeria (CBN) in its regulatory capacity forced all banks to either give up their non-banking businesses or adopt/restructure into a holding structure. The regulator believed that it was an important risk management strategy to separate lenders from entangling with other financial services like insurance or investments. A status expected to make the banks focus more on its banking roles.
In our opinion, the Holdco status when fully achieved will improve Guaranty Trust Bank performance indices, and improve its valuation metrics. Please note that, practically, the status is not fully wired to improve performance, since poor investment venture may dampen the bank income. In other words, care should be taken to measure the risk status of the various investment options.
Market rumors have it that other banks eyeing the Holdco status are; Access Bank and Sterling Bank amongst others.