The board of Guaranty Trust Bank Plc, on Wednesday, became the first major company on the Nigerian Stock Exchange (NSE), to present its unaudited financials for the nine months ended September 30, 2019, showing a slower or flat growth in revenue lines and profit, while expenses grew faster, with the exception of net fee and commission income, as loan impairment charges climbed by a significant 59.03%.
Specifically, gross earnings declined by a marginal 3.33% from N337.269bn in the corresponding period of 2018, to N326.033bn; after interest income slipped to N224.187bn from N237.545bn, representing 5.62% drop. Interest expense dropped 23.4% down from N66.903bn to N51.25bn; leaving net interest income of N172.937bn, compared to N170.641bn.
Loan impairment charges climbed to N2.763bn from N1.736bn, helped by the N1.931bn recovery of loans previously written off, up from N1.476bn recovered in the prior nine months. Net interest income after loan impairment charges, therefore, stood at N170.175bn; up from N168.905bn.
Fee and commission income for the period rose by 19.9% from N40.348bn in 2018 to N48.379bn, boosted by the N11.039bn earned as electronic business income, which soared from N6.768bn in 2018; followed by N8.078bn in credit-related fees and commissions, which also jumped from N5.894bn; while account maintenance charges stayed flat at N8.54bn from N8.396bn. In the period also, commission on foreign exchange deals rose from N4.768bn to N5.454bn, while income from financial guarantee contracts issued dropped from N3.033bn to N2.423bn; among others.
Fee and commission expenses dropped to N1.88bn from N2.56bn, representing a decline of 24.98%, driven by bank changes of N1.142bn from N1.406bn; while loan recovery expenses fell from N1.101bn to N739.423m. Net gains on financial instruments held at fair value through profit and loss fell by 51.94% to N9.643bn from N20.065bn.
Other income increased by 11.48% from N39.31bn to N43.823bn, boosted by the N11.613bn from discounts and recoverable (FX), up from N5.328bn; and “recoveries and others,” amounting to N10.988bn, compared to N5.872bn in 2018. Net impairment gain on financial assets stood at N110.63m from a loss of N50.638m; personnel expenses dropped from N28.121bn in the first nine months of 2018 to N27.299bn.
Operating lease expense was nil for the period under review, compared to N2.29bn; depreciation and amortization inched 24.41% up from N12.474bn to N15.519bn. Other operating expense dropped from N58.938bn to N54.648bn, chief among which was Asset Management Corporation of Nigeria (AMCON) expenses of N15.486bn, which fell from N16.307b; as well as the N6.326bn Deposit Insurance premium, which rose from N6.03bn.
Profit before tax, therefore, stood at N170.651bn, a slight increase from N164.245bn; just as income tax stood at N23.061bn from N22.022bn; and net profit of N146.989bn, representing Earnings Per Share of N5.19; up from N142.223bn, or N5.03 per share.
On the balance sheet, total assets stood at N3.519tr, boosted by customer loans and advances that rose from N1.259tr to N1.377tr. Total liabilities improved marginally from N2.711r to N2.882tr, with customer deposits rise from N2.273tr to N2.39tr; following which shareholders’ funds improved from N575.567bn to N636.752bn.