Guaranty Trust Holding Company (GTCO), one of Nigeria’s leading financial services groups, has successfully raised ₦209.41 billion ($135 million) from retail and institutional investors in the first tranche of its mandatory capital raise program. The move aligns with the Central Bank of Nigeria’s (CBN) directive to bolster banks’ capital reserves.
Key Details of the Capital Raise
- Amount Raised: ₦209.41 billion ($135 million).
- Purpose: Strengthen GTCO’s capital base and position it for strategic growth in banking and non-banking sectors.
- CBN Mandate: Nigerian banks with international operations must raise their minimum capital to ₦500 billion by March 2026.
GTCO’s raise comes as part of a broader effort to meet the new regulatory requirements introduced by the CBN, which increased capital thresholds tenfold for different categories of banks:
- International Banks: ₦500 billion.
- National Banks: ₦200 billion.
- Regional Banks: ₦50 billion.
Strategic Importance of the Capital Raise
Segun Agbaje, Group CEO of GTCO, emphasized the significance of this milestone, describing it as a foundational step toward achieving the group’s strategic roadmap. “This sets a solid foundation for accelerating our strategic roadmap which aims to pivot the group for non-transformational growth and unlock greater value across banking and non-banking business,” he said in a filing with the Nigerian Exchange (NGX).
Sector-wide Recapitalization
GTCO’s announcement follows similar actions by other Nigerian banks:
- First City Monument Bank (FCMB): Raised ₦150 billion in September 2024, with plans to increase it to ₦340 billion.
- Access Holdings: Completed a ₦600 billion raise in December 2024, surpassing the CBN’s minimum requirements for international banks.
Despite GTCO’s significant fundraising effort, the ₦209 billion raised falls short of the ₦500 billion requirement. The bank plans to conduct a second raise in 2025 to meet the regulatory deadline.
Operational Challenges and Investment Focus
Proceeds from the raise will be used to recapitalize GTBank Nigeria, GTCO’s flagship subsidiary, which has faced operational challenges:
- Core Banking Issues: In October 2024, GTBank’s 32.8 million retail customers experienced numerous complaints, including failed transfers and erroneous debit and credit alerts. These issues stemmed from the bank’s switch to the Finacle core banking platform, intended as a cost-saving measure.
- Efficiency Goals: While the capital raise alone may not resolve all operational inefficiencies, it will provide GTBank with resources to address pressing challenges and support its ambition to reach a $1 billion profit target.
Market Reaction
Following the announcement, GTCO’s shares rose by 1.42% to ₦57 on Monday, signaling investor confidence in the group’s growth trajectory and its ability to navigate regulatory and operational pressures.
Outlook for GTCO and Nigerian Banking
With all 25 Nigerian banks required to meet the CBN’s new capital requirements by March 2026, GTCO’s capital raise highlights the sector’s ongoing transformation. Banks are under pressure to secure funding while improving operational efficiencies to remain competitive.
GTCO’s efforts to recapitalize and streamline operations position it as a frontrunner in Nigeria’s financial services industry. However, the successful execution of its second tranche in 2025 will be critical to fully aligning with regulatory demands and achieving its growth aspirations.