With 81% Drop In Loan Loss Provision, GTBank Nets N170.5bn, Offers N2.40 Dividend

The board of Guaranty Trust Bank Plc presented its audited financials for the year ended December 31, 2017 with a flat earnings income, while interest income, net interest income; profit recorded double digit growth, helped by the 81.36% drop in loan loss provision from N65.29bn in 2016, to N12.169bn.
The board has recommended a final dividend per share of N2.40, in addition to the interim dividend of 30 kobo paid at half year, bringing total dividend to N2.70 per share as against N2.00 in 2016; from earnings per share of N6.03 for consideration at the annual general meeting slated for April 10, for payment same day. Qualifying date for the dividend is March 27, 2018 and closure date- March 28, 2018.
Details of the result showed that gross earnings for the year stood at N419.2bn, 1.11% better than the previous year’s N414.6bn; despite the 24.69% rise in interest income from N262.5bn to N327.3bn. A breakdown of the revenue showed that corporate banking fetched a total of N261.384bn; retail banking followed with N86.083bn; just as commercial banking earned N41.71bn; much more than the N19.134bn from SME banking and N9.347bn from public sector banking.
A further breakdown of the income showed that interest on loans remained the biggest revenue earner at B248.356bn, up from N238.228bn; even as the biggest growth came from trading in treasury bills, which fetched N116.685bn, more than twice the N55.054bn recorded in 2016. ‘Contingents’ suffered the biggest decline from N106.515bn to N33.973bn; while bonds trading was flat at N3.445bn from N3.388bn.
Interest expense increased by 26.25% from N67.1bn to N80.7bn, boosted mainly by the N66.844bn recorded from corporate banking; leaving net interest income at N246.7bn, up from N195.4bn, representing a 26.25% increase. Net interest income after loan impairment charges stood at N234.494bn from N130.109bn.
Fee and commission income rose to N42.921bn from N39.403bn; while expense fell from N3.456bn to N2.189bn, resulting in net fee and commission income of N40.732bn, as against prior year’s N35.946bn. Net gains on financial instruments classified as held for trading jumped to N11.338bn from N5.218bn; other income crashed to N37.632bn from N107.499bn; while personnel expenses was flat at N1.596bn from N1.375bn. Depreciation and amortization rose slightly from N15.249bn to N15.383bn; even as other operating expenses increased to N73.445bn from N67.56bn; following which profit before tax stood at N200.2bn, 21.26% better than the N165.1bn in 2016. Income tax expense for the period dropped to N29.772bn from N32.855bn; resulting in profit after tax of N170.5bn, up from N132.3bn, a 28.87% rise; representing net profit margin of 40.67%, which is likely to be the industry and market’s best for a long while.
Total assets for the period crawled 7.53% up from N3.116tr to N3.351tr, with customer loans and advances dropped to N1.448tr from N1.589tr; total liabilities growth was even slower at 4.38% at N2.725tr from N2.611tr, as customer deposits rose slightly to N2.062tr from N1.986tr. Shareholders’ fund jumped by 23.83% to N625.2bn from N504.9bn.

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