Guaranty Trust Bank Plc (GUARANTY), Nigeria’s biggest lender by market value, reached the highest in four years and gained the most in almost nine months on bets of higher earnings, according to Renaissance Capital.
The stock rose 5 percent to close at 16.82 naira in Lagos, the commercial capital, the biggest gain since Aug. 12 and the highest price since April 2008.
Guaranty is projected to achieve a 40 percent growth in earnings this year, compared with 37 percent for the Nigerian banking industry, Adesoji Solanke, a Lagos-based Africa banking analyst at Renaissance Capital, said by phone today. The lender’s results for 2011 and the first quarter of this year have demonstrated “the sustainability of its earnings profile,” he said.
Full-year net income rose 37 percent to 52.65 billion naira, the company said in March. First-quarter profit rose 35 percent to 19.3 billion naira, it said April 19.
Guaranty will benefit from expected high interest rates, Solanke said. High interest rates “will be good for a bank like Guaranty which is highly liquid and with very low cost of funds of between 2 and 3 percent,” he said.
The Central Bank of Nigeria raised interest rates to a record 12 percent last year, and RenCap’s economists expect it to remain at this level for most of this year, Solnake said.
Guaranty’s shares have risen 18 percent this year, compared with a 7.6 percent rise in the Nigerian Stock Exchange All-Share Index.
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