Guaranty Trust Bank Plc, Nigeria’s largest lender by market value, rose to a record as investors speculated the stock was undervalued compared with its peers, according to Asset and Resource Management Company Ltd.
The stock rose for a 5th day, gaining 2.9 percent to 28.80 naira by the close in Lagos, Nigeria’s commercial capital. That was the highest since at least Jan. 29, 2002 when Bloomberg started compiling the data. About 14 million shares, or 80 percent of the three-month daily average volume, were traded.
“The bank is the most profitable in the industry from the point of view of return on equity,” which was 31 percent for the year through December, Alexander Edafe, an analyst at Lagos-based Asset and Resource Management, said today by phone. “Our fair valuation for the bank is 33 naira per share.”
Net income for the first quarter through March rose to 22.3 billion naira ($141 million) from 18.7 billion naira a year earlier, it said in April 18 statement published on the website of the Nigerian Stock Exchange. Investment and other operating income jumped 53 percent to 18 billion naira.
“Investors anticipate the bank’s income to rise quarter-on-quarter from expansion into retail banking,” Edafe said.
The lender plans to almost double loan growth to 20 percent this year from about 11 percent in 2012, Chief Executive Officer Segun Agbaje said on April 8. Guaranty Trust, which operates in six countries outside Nigeria, is seeking to open units in East Africa to tap regional growth, he said.
The bank’s shares have gained 25 percent this year, compared with the 28 percent advance in the 10-member Nigerian Stock Exchange Banking Index.