GTB Nets N44.67bn Profit, After 52% Loan Loss Provision Drop

The management of Guaranty Trust Bank (GTB), on Wednesday released its unaudited result for the first quarter ended March 31, 2018, showing single digit growth in gross earnings, even as the expenses side rose at a faster pace.
Profit was however better than prior first quarter, helped by the drop in loan loss provisions for the period by half, while other income soared by 305.6%, following which net profit stood N44.67bn.
The balance sheet growth of GTB for the period was equally sluggish, even as loans and advances dropped 6.51%; customer deposits inched 9%; and shareholders’ funds, 14.29%.
Gross earnings rose by N9.253bn or 9.27% from N99.716bn in the first quarter of 2017, to N108.969bn; helped by the N80.772bn interest income, which fell by just N3.332bn or 3.96% from N84.108bn; while interest expenses soared by N3.105bn or 17.27% to N21.084bn, compared to prior first quarter’s N17.979bn. Net interest income therefore dropped to N59.688bn, as against the N66.129bn in 2017Q1.
Loan impairment charges of GTB dropped by N1.773bn or 51.96% to N1.639bn from N3.412bn; resulting in net interest income after loan impairment charges of N58.049bn, as against the N62.716bn in the comparative period of last year.
Fee and comm income increased to N15.224bn from N13.68bn, representing an increase of N1.544bn or 11.28%; fee and commission expenses increased by N151.527m or 25.89% from N585.261m to N736.788m.
Net fee and commission income came to N14.487bn from N13.094bn; net gains on financial instruments held for trading rose to N5.153bn, up from N4.413bn; just as other income climbed by N5.892b or 305.6% from N1.928bn in 2017 to N7.82bn. This was boosted by the N5.463bn foreign exchange revaluation gain, as against the loss of N306.419m in 2017.
Personnel expenses rose slightly from N8.192bn to N9.478bn; operating lease expenses increased to N620.794m to N456.637m; depreciation and amortization was flat at N4.246bn, compared to N4.142bn in 2017.
Other operating expenses was equally constrained at N18.54bn from N18.969bn, the biggest contributor to which was the N4.391bn Asset Management Corporation of Nigeria (AMCON) expenses of N4.391bn paid by GTB, up from N3.366bn; followed by occupancy costs of N2/379bn from N1.762bn; and N2.202bn cost of outsourcing services, from N2.116bn and the deposit insurance premium of N2.09bn from N1.848bn. Profit before tax therefore increased marginally from N50.392bn to N52.624bn; income tax expense dropped to N7.954bn from N8.914bn; resulting in after tax profit N44.67bn from N41.477bn. This translated to earnings per share to N1.47, from N1.58 each in the corresponding period of 2017.
Total assets for the period stood at N3.506tr, up by N155.707bn or 4.64% from N3.351tr, boosted by the loans and advances at N1.354tr, which represented a N94.231bn or 6.51%, compared to the N1.448tr reported in 2017Q1.
Total liabilities increased by N245.753bn or 9.01% from N2.725tr to N2.971tr; lifted by the N151.703bn or 7.35% growth in customer deposits for the period; while shareholders’ funds declined by N89.33bn or 14.29% to N535.122bn from N625.167bn.