GTCO vs Zenith: Two Bank Strategies, Similar Profits, Different Risks

GTCO and Zenith Bank closed 9M 2026 with nearly identical pre-tax profits—₦879.9 billion vs ₦928.8 billion—but their paths there couldn't be more different. GTCO played defense: loans fell 4% to ₦3 trillion, bad loans dropped to 4% from 5%, but deposit costs surged 43% to ₦325 billion, squeezing net interest income. The group now earns two-thirds of its interest from securities (₦5.94 trillion), not lending. Zenith played offense: loans jumped 11% to ₦12.26 trillion, fee income surged 27% to ₦256.9 billion, and funding costs dropped. But Stage 3 loans climbed to ₦600.6 billion (4.9% of book) from ₦422.4 billion.

For investors, this frames a clear choice. GTCO trades at 5.5x earnings and 1.27x book—paying up for a cleaner balance sheet. Zenith, despite a 94% YTD rally, sits at 4.7x earnings and 0.97x book—cheaper but carrying rising credit-impaired loans. Zenith's 70% drop in impairment charges looks impressive until you see Stage 3 loans growing.

Going into 2027, GTCO must tame deposit costs while Zenith must prove its loan expansion won't rot. Which risk would you rather own—funding pressure on a shrinking loan book, or credit risk on an expanding one?

SOURCE: https://nairametrics.com/2026/11/03/analysis-zenith-looks-cheaper-gtco-looks-safer/