Business
BREAKING: GTCO Mulls N500 Billion in public offer
BREAKING: GTCO mulls N500 billion in public offer
NewsReport Nigeria reports 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.
The central bank wants banks to strengthen their capital bases in accordance with the government’s objective of reaching a GDP of one trillion Naira, as Nairametrics previously reported.
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.
Read Also: Just In: Trader Frenzy: GTCO shares cause unprecedented trading activity
Meanwhile,
With just N8.6 trillion in assets, GTCO is the least valuable of the FUGAZ. With N21.4 trillion, the industry leader, Access Bank, is far larger.
As of September 2023, GTB possesses the least amount of net assets and deposits, with N1.2 trillion and N6.3 trillion, respectively.
Information that has reached us: Additionally, reports suggest that the devaluation of the naira has affected the single-obligor limits of the majority of banks, requiring them to raise capital in order to engage in big-ticket lending.
Analysts at Nairametrics believe GTCO is in a situation where it might have to take on a subordinate role in transactions that it could have taken the lead in.
Prior to Nairametrics’ report, on Monday, March 11th, the NGX witnessed the trading of approximately 96.63 million GTCO shares.
Although we are unable to verify the buyer’s identity, sources have informed Nairametrics that a foreign investor started the trade.
Consequently, GTCO share transactions accounted for 23.4% of the market activity today, based on this volume.
Other non-banking companies in Guaranty Trust Holding Company Plc’s ecosystem include payment, fund management, and pension fund management companies.
Nairametrics reached out to the bank for clarification, but they declined to comment.
