The GTBank’s Market Cap

The GTBank’s Market Cap

GTBank is Nigeria’s biggest bank by market capitalization. But things have not been fascinating when you look at its market cap in the Nigerian Stock Exchange. GTBank delivers industry-leading cost-to-income ratio (CIR). CIR is a “gold standard” in ascertaining the efficiency in the utilization of factors of production in banking. In Nigeria, no bank comes close to GTBank’s number: last one was sub-40%.

Yet, GTBank, despite its legendary efficiency and record profits, continues to lose market cap. It was valued at about N1.3 trillion two years ago; today, it is less than N800 billion (see chart) [among the big banks, others have also seen erosion of value].  My question to the community is thus: what is happening to GTBank?

I have some pointers: perception of disruption from MTN, and broad fintech to the banking sector. Gross margin spread between banks and fintech, and broad positioning across African markets as integration hits. If that integration happens, banks like UBA with operations in 20 African countries will become dominant to anchor trades and commerce out of Nigeria. Also, besides banks, investors have fintech as options to invest in the financial sector.

And the smiling curve – watch the video here. You can deepen this perspective why a category-king bank that does largely most things right is not getting love from markets.

Phase 1 – banks at the center


Phase 2 – Banks at the edges

[ Please see this as an academic endeavor, not an attack. GTBank is one of my company banks].


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2 thoughts on “The GTBank’s Market Cap

  1. No magic answer, but it’s not too difficult to put all the probable pieces together, and from there the ‘why’ becomes more discernable.

    The first thing is, why would you hold a sizable GTBank shares, if you can lay your hands on MTN shares? What are the possible growth trajectories or potentials for GTBank, going forward, and how attractive and viable are they? There is an MTN effect still going on in the stock market, and then add to the fintech evolution, you just realise that banks are no longer ‘sure bets’ as they used to be.

    Again, market valuation is sometimes asymmetrical to real performance and profitability, the former is a sentiment game, most times with no credible basis on reality. The bank is not doing badly, but markets have different ideas.

    So for GTBank to reclaim its lost position, it needs to tell a new story, throw up some new big things, and align everything to its strong brand reputation; maybe it could manage to turn many heads. But at the moment, the momentum is not with the banks, and GTBank happens to be on the hurricane path, which is never a nice experience.

    Maybe the era of banking sector holding sway in the stock market is coming to and end, the audience wants a new song…

    1. ” I am happy that you have not released yours, I will be happy to welcome it if you end up releasing it.” That is indeed possible – we may see the era of telcos with MTN and Airtel making the moves. Possibly, Glo and 9Mobile can join to activate the insurgent technology sector (MTN and Airtel are not members of that group though)


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