The board of Guaranty Trust Holding Company, on Tuesday presented its unaudited financials for the 9 months ended September 30, 2023, the highpoints of which included 181.87% growth in profit after tax, despite the 2,318.43% leap in net impairment charge on other financial assets, and tax expense, among others.
There was an equally robust growth in the balance sheet during the period, as total assets improved by 33.65 and total liabilities by 33.13% year-to-date.
Specifically, gross earnings for the period improved to N841.5bn, up by N485.8bn or 135.58% from N355.7bn in the corresponding period of last year, after “other income” grew by N338.78bn or 2,054.95%. Of this, interest income remained the biggest component, accounting for N374.557bn, 61.11% better than the N232.492bn reported in the previous nine-month. Interest expense rose by 79.93% from N42.804bn to N77.018bn, as the bank paid N69.616bn on customer deposits; leaving a net interest income of N297.539bn from N189.688bn, or 56.86%.
Loan impairment charges rose to N89.464bn from N3.699bn; while net interest income after loan impairment charges stood at N208.073bn, up from N185.988bn in the corresponding period of 2022.
Fee and commission income improved from N78.704bn to N91.318bn, the bulk of which was the N30.906bn earned as electronic business income, up from N26.944bn in the corresponding period of last year; followed by account maintenance charges of N18.04bn from N15.881bn. Fee and commission expenses grew from N8.634bn to N8.634bn, lifted by the N7.211bn paid as bank charges, compared to the previous N5.833bn; bringing net fee and commission income to N82.479bn, up from N70.069bn.
Net trading gains on financial instruments held at fair value fell from N36.623bn to N29.186bn, as net foreign exchange realised trading gain dropped from N31.711bn to N25.694bn. Other income stood at N355.271bn from just N16.486bn, boosted by the N334.351bn foreign exchange revaluation gain, compared to the previous N7.395bn loss. Net impairment charge on other financial assets stood at N59.109bn, driven by the N36.115bn impairment charges on contingents; while impairment charge on investment securities amounted to N20.017bn; from nil in the corresponding period of last year.
Personnel expenses rose from N30.538bn to N37.576bn, with wages and salaries accounting for N36.332bn from N29.603bn; depreciation and armotisation rose to N29.704bn from N27.086bn. Other operating expenses rose to N115.417bn from N81.818bn, the lion’s share of which was the N27.433bn paid to the AMCON, up from N23.288bn; resulting in profit before tax of N433.203bn from N169.724bn; as income tax expense increased to N65.786bn from N39.375bn; resulting in net profit of N367.417bn, compared to N130.348bn; which translated to Earnings Per Share of N12.98, up from N4.55 each.
On the balance sheet, total assets rose to N8.615tr from N6.446tr at the end of December 2022, boosted by N2.219tr in customer loans and advances, from N1.885tr at the end of last year.
Total liabilities grew from N5.515tr to N7.342tr, as customer deposits jumped from N4.485tr to N6.246tr, which the group said in a statement remained well structured and resilient, even as shareholders’ funds closed at ₦1.3tr.
Full Impact Capital Adequacy Ratio (CAR), it said, remained very strong, closing at 25.1%, while asset quality was sustained as IFRS 9 Stage 3 Loans improved to 3.8% in September 2023 from 5.2% December 2022, however, Cost of Risk (COR) closed at 4.1% from 0.6% in December 2022 owing to Management’s conservative stance on provisioning as macros worsened y-o-y, weighing negatively on the ECL variables.
The statement quoted GTCO’s Group Chief Executive Officer, Segun Agbaje, as saying the “performance underpins our strategic positioning as a leading Financial Holding Company and reaffirms our strong capabilities to successfully navigate the challenges in our operating environment. Going into the final quarter of the year, we will continue to leverage the strengths within our growing financial services ecosystem to improve our products and service offerings, enhance customer experience, and maximise shareholder value.”
He noted with pride “our work towards Promoting Enterprise across the African continent over the years and remain committed to helping indigenous small businesses thrive through our consumer-focused fairs. The 6th Edition of the GTCO Fashion Weekend is scheduled to hold in Lagos, Nigeria, on 11/12 November 2023, and will give entrepreneurs in the Nigerian fashion retail space a free-business platform to showcase their diverse talents and creativity to a global audience.”