Profit ratio

Fitch confirms Guaranty Trust Holding at ‘B’; stable outlook

Fitch Ratings has affirmed the long-term issuer default (IDR) ratings of Nigeria-based Guaranty Trust Holding Company Plc (GTCO) and its main banking subsidiary Guaranty Trust Bank Limited (GTB) at ‘B’ with stable outlook and long-term national ratings at ‘AA’.

According to the rating agency, the long-term IDRs of GTCO and GTB were determined by their stand-alone creditworthiness, as expressed by their viability ratings (VR) of “b”.

The RVs reflect the entities’ exposure and sensitivity to the volatile Nigerian operating environment as well as the group’s franchise strengths, strong profitability and solid capital reserves, which provide good loss absorbency.

The VRs are one step below the implied “b+” VRs, reflecting the operating environment/sovereign rating constraint.

“National rankings are driven by the autonomous strengths of GTCO and GTB. They are at the higher end of the scale given the strong business and financial profiles of GTCO and GTB.

Leading bank franchise

GTCO’s business profile is based on GTB’s leading banking franchise and a well-established and diversified business model.

GTB represents 99% of the group’s assets at the end of 2021. The establishment of a holding structure in 2021 allows GTCO to provide end-to-end financial services, thus strengthening its franchise.

Solid profitability

GTCO’s profitability remains strong and at the high end of its peers, but was weaker in 2021 (operating income/risk-weighted assets: 7.2%; 2020: 8.3%) due to lower returns on the securities portfolio (end of 2021: 24% of total assets).

Net interest margin contracted to 6.8% in 2021 (2020: 9%) despite loan growth.

Profitability remains supported by still low loan impairments and good cost control (cost/income ratio: 43% in 2021).


Capitalization is a relative strength, GTCO’s Fitch Core Capital (FCC) ratio (end 2021: 28.2%), Total Capital Adequacy Ratio (25.4%) and Tangible Leverage Ratio (15. 9%) comparing favorably to those of its peers.