• Offers N2.70 Dividend

The directors of Guaranty Trust Bank Plc, on Thursday presented its audited financials for the year ended December 31, 2020, highlights of which included the slow growth top and bottom-line, and a 298.49% jump in loan impairment charge to N19.572bn, compared with the previous N4.911bn in the corresponding period of 2019, in what is obviously the aftermath of the novel Coronavirus pandemic outbreak.

The group’s balance sheet however improved significantly, with total assets growing by N1.185tr or 31.54% to N4.944tr from N4.758tr in 2019; boosted by customer loans and advances, which rose to N1.662tr from N1.5tr; just as total liabilities improved by N1.058tr or 34.46% from N3.071tr in the preceding year to N4.13tr, helped by the N976.778bn or 38.56% growth in customer deposits from N2.532tr to N3.509tr.

Specifically, gross earnings inched 4.57% from N435.306bn in 2019 to N455.229bn; helped by interest income of N288.278bn, which fell from N291.658bn; the management successfully constrained interest expense growth, as it dropped N64.841bn to N47.069bn. Net interest income stood at N253.668bn, from N231.363bn; while net interest income after loan impairment charges stood at N234.095bn from N226.451bn.

A breakdown of the figures showed that corporate banking contributed the lion’s share of total revenue, accounting for N209.896bn; followed by retail banking with N100.559bn; while commercial banking, SME banking and public sector contributed N24.093bn, N21.707bn and N7.083bn respectively.

Corporate banking equally accounted for N181.059bn of total net operating income, ahead of the N94.263bn from retail banking; while N21.842bn came from commercial banking; and N20.561bn from SME banking; among others.

A further breakdown by geographical segments showed that all of N363.209bn or 79.78% of total revenue was derived from GTBank’s Nigerian operations, followed by the rest of Africa with N68.036bn; east Africa, N19.187bn; and Europe, N4.797bn.

Similarly, N201.291bn or 84.53% of profit was derived from Nigeria, compared to N196.736bn or 84.94%; rest of Africa followed with N34.54bn, up from N31.155bn; while its European business suffered N1.32bn loss over the period, compared to a profit of N1.416bn in prior year.

Fee and commission income dropped to N53.179bn from N62.418bn, the bulk of which was t he drop in credit related fees and commissions that fell from N9.59bn to N5.913bn; while account maintenance charges improved marginally from N11.594bn in 2019 to N12.496bn. Corporate finance fees dropped from N4.311bn to N1.761bn; electronic business income dropped to N11.77bn from N15.662bn; commission on foreign exchange deals was flat at N6.074bn from N6.681bn; commission on touch points increased to N2.239bn from N1.876bn; even as account services, maintenance and anciliary banking charges yielded N2.829bn, compared to the previous N7.514bn. Transferred related charges, over the period fetched N6.969bn, up from the previous year’s N2.838bn.

Fee and commission expense however grew from N2.975bn to N6.244bn; buoyed by the N4.058bn paid on bank charges from N1.772bn; followed by loan recovery expenses that grew from N1.202bn to N2.186bn. Net fee and commission income therefore slipped to N46.935bn from N59.443bn.

Other income however soared to N76.826bn from N55.793bn in 2019, boosted by foreign exchange revaluation gain of N56.636bn, compared to N17.065bn. Net impairment reversal on other financial assets equally ballooned from N100.473m to N3.19bn; even as personnel expenses stayed flat from N37.284bn to N37.606bn. Depreciation and amortization increased to N29.046bn from N22.692bn; other operating expenses increased from N68.879bn to N78.677bn.

Profit before tax therefore stood at N238.095bn, up by N6.387bn or 2.75% from N231.707bn; with income tax expenses rising from N34.842bn in 2019 to N36.655bn. This left profit after tax at N201.439bn, an increase of 2.32% from N196.865bn, translating to Earnings Per Share of N7.11, up from N6.96, out of which the board has recommended a final dividend per share of N2.70, which added to the 30 kobo interim dividend paid at the end of the half year, bringing total payout to N3.00, subject to approval of shareholders at5 the next annual general meeting.

Qualification date for the final dividend is set at March 31, 2021, as the registered will be closed on Thursday, April 1, 2021, while electronic payment is scheduled for April 9, same date as the annual general meeting in Lagos.

A statement by the bank applauded the result, especially the “improved performance across all key financial metrics in the face of the unprecedented challenges brought on by the COVID-19 pandemic, reflecting the quality of past decisions and reaffirming its position as one of the best managed financial institutions in Africa.”

The statement quoted Segun Agbaje, the Managing Director/Chief Executive of the bank as reaffirming that “2020 was arguably the most challenging year that the world has faced in decades. In such unprecedented times, we sought to live out the full extent of our values; safeguarding lives and livelihoods for our people, our customers and across the communities where we operate.

“We were on solid footing going into 2020; the strength, scale and liquidity of our balance sheet, coupled with the quality of our past decisions and the efficacy of our digital-first customer-centric strategy gave us the resilience and flexibility to navigate the economic shocks and market volatility that dominated the year.”

Amidst the many challenges that persist, he continued, “we remain ardent believers in Africa’s growth potential. Our world is increasingly digital, and we see it opening new and exciting opportunities for empowering people and uplifting our communities. With our commitment to deepening customer relationships and intense focus on delivering innovative financial solutions, we enter 2021 well-positioned to lead this new world.”