In brief
- Strong Revenue Momentum Sustained in 9M2025: GCB delivered a solid 9M2025 performance, with total revenue surpassing forecasts by 9.0% and profit by 14.1%. Growth was supported by expanding loan volumes and higher yields on earning assets. Interest income rose as loan demand strengthened amid improving business sentiment, while cost of funds remained contained due to stable deposit pricing. The bank’s 36.7% loan-to-deposit ratio provides headroom for further growth into year-end.
- Broad-Based Recovery in Non-Funded Income: Non-interest income rose 60.6% y/y, supported by higher trading gains and stronger transaction volumes. Sell–buy back arrangements with clients boosted trading income, while remittance and trade finance activities continued to improve. We expect the bank’s ongoing efforts to deepen digital and payment partnerships to strengthen fee-based revenue streams and reduce reliance on interest income over time.
- Digitalisation and Loan Growth to Drive 2026 Earnings Upside: Looking ahead, GCB’s earnings outlook remains positive, supported by digital transformation and balance sheet growth. The G-Money platform and revamped mobile banking services are deepening customer engagement and improving efficiency. With liquidity strengthened by the revised CRR directive, GCB is well positioned to scale credit without funding strain. We project a 22.8% CAGR in loan growth over the medium term.
- Improving Macros and Capital Stability Support Dividend Resumption: Easing inflation, a firm cedi, and lower funding costs should sustain profitability through 2026. The temporary single-obligor breach that halted dividend payment in 2025 is expected to be resolved, paving the way for dividend resumption for FY2025 results. Strong capital buffers and prudent asset quality management should allow GCB to maintain regulatory comfort while rewarding shareholders.
Rating Summary:
We maintain our “BUY” rating on GCB Bank PLC (“GCB”), reflecting sustained earnings strength, improved asset quality, and disciplined cost management. The 9M2025 results reaffirm the bank’s solid momentum, with revenue, costs, and profit all outperforming expectations. Total revenue beat our forecast by 9.0%, supported by robust balance sheet growth, higher asset yields, and a growing loan portfolio. Costs were 13.2% below forecast, as easing inflation helped contain pressures despite higher personnel and technology spending. Profit after tax more than doubled (+117.2% y/y) to GHS 1.3bn, exceeding our projection by 14.1% and surpassing the FY2024 outturn. Net interest income rose 44.4% y/y to GHS 3.1bn, while non-interest revenue climbed 60.6% y/y to GHS 1.2bn, driven by an 89.1% surge in trading income. A 17.0% drop in impairment charges lifted pre-impairment income by 48.5% y/y to GHS 4.3bn, highlighting the depth of GCB’s earnings recovery. On the balance sheet, loans and advances grew 34.8% y/y to GHS 13.8bn, raising the loan-to-deposit ratio to 36.7%, while deposits increased 22.4% y/y to GHS 37.4bn, reinforcing funding stability. The NPL ratio improved to 10.8%, reflecting stronger credit quality, while the capital adequacy ratio (with relief) held steady at 16.2%, providing sufficient headroom for further growth.
We revise our fair value estimate upward to GHS 19.76 per share, reflecting a lower risk-free rate of 15.60% (down from 17.74% at HY2025) in line with current yields on restructured domestic bonds, alongside refinements to our valuation framework. These include a peer mean beta adjustment based on stronger statistical validity and enhancements to our multi-factor linear regression P/B model. In our view, these valuation upgrades, coupled with stronger-than-expected earnings delivery, improving credit metrics, and sustained balance sheet growth, reinforce GCB’s favorable outlook. We believe the bank remains well-positioned to extend its outperformance into year-end, supported by rotation into higher-yielding risk assets and steady improvement in earnings resilience heading into FY2026.