Key questions this article answers:
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Despite being a top bank in Nigeria (in terms of profitability and asset size), GTCO’s stock price has persistently declined since 2020. What can management do to deliver improved value to its shareholders?
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Companies typically have four major options to deliver value: invest in capital projects (that’ll increase profits in the future), pay cash dividends, acquire another company or business, or undertake a share buyback. Can a share buyback be the answer to GTCO’s woes?
2022 was not the best year to be a Nigerian bank's Chief Executive Officer (CEO).
Higher costs (due to the Central Bank of Nigeria’s policies and inflation) diminished banks’ ability to make profits, leading to a selloff on banking stocks. For instance, First Bank posted a 71% y/y rise in regulatory costs to ₦52.5 billion in H1’22 (versus ₦30.7 billion in H1’21). Collectively, the Nigerian banking equities index lost 1.8%
