Cordros Marks GTCO Top Pick, Cites Superior Earnings Quality
Equity analysts at Cordros Securities Limited have made Guaranty Trust Holdings Company (GTCO) their top stock pick for 2026 despite earnings challenges facing the group in 2025.
GTCO has seen declining profitability up to the third quarter of 2025 due to cost pressure and lower earnings amidst a tight regulatory environment.
In its 2026 outlook, Cordros Securities Limited said the banking sector will enter 2026 in a fundamentally healthier position, following balance-sheet strengthening through the recapitalisation programme.
Equities analysts noted that the completion of catch-up provisioning in 2025, and a more stable macro and interest-rate backdrop would also strengthen the industry. Rated buy, GTCO with target price of N115.19 is the firm’s top pick for 2026, citing superior earnings quality and cost leadership
“We expect a re-rating in 2026 due to sustained return on equity (ROE) outperformance over cost of equity (COE), healthy net interest income, and continued leadership in cost management.” At its current share price of N86.00, analysts said GTCO trades at 0.9x price to book value and 4.5x price to earnings ratio.
The firm’s positive outlook on GTCO underscore a +35.1% upside potential stemming from the group’s superior earnings quality, a clean loan book, which is expected to support credit creation and bolster core earnings.
The group strength is also supported by its sustained leadership in cost management, and undeniable balance sheet strength, which supports balance sheet expansion.
Cordros Securities Limited told investors in the report that Holdco’s earnings profile is anchored by a high quality revenue mix and consistently strong margins.
It has a leading low-cost deposit base that supports a structurally wide net interest margin, while robust fee income from payments, digital channels, and corporate banking helps diversify revenue.
According to Cordros Securities Limited, GTCO is the only bank with a ROE (30.5%) that exceeds its COE (25.1%), reflecting the bank’s ability to generate sustainable returns from its core operations.
“When the apex bank issued the industry-wide forbearance directive, GTCO was the only bank without forbearance exposures, highlighting the quality of its loan book.
“We saw the benefits of this compliance materialise, as the bank grew its loan book by 16.5% year to date, compared with 4.5% for its peers.
“This further positions the HoldCo to sustain credit creation in 2026 without being weighed down by legacy toxic assets, bolstering core earnings,” Cordros Securities Limited explained.
Analysts call the group’s irrefutable cost leadership, adding that cost discipline remains a core advantage, with the bank consistently delivering the lowest cost-to-income ratio in the sector, reinforcing earnings resilience across rate cycles.
GTCO is projected to deliver a 2026 cost to income rate of 26.8%, compared with 47.9% expected by its peers. Analysts said this efficiency ensures that topline growth translates directly into bottom line results.
The bank’s balance sheet is characterised by solid capital buffers with a capital adequacy ratio of 36.5%, strong internal capital generation, a high proportion of stable, low-cost deposits (CASA: 81.8%), and a sturdy liquidity ratio (43.0%).
The combination of strong capital adequacy and liquidity provides flexibility for growth while cushioning volatility from macro or currency pressures, Cordros Securities Limited emphasised.
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