GTBank Reports Flat Income, Profit Slide, On Loan Impairment, OPEX Growth

The management of Guaranty Trust Bank Plc, on Thursday, presented it unaudited financials for the nine months ended September 30, 2020, indicating a flat growth in gross earnings, just as management successfully constrained interest expense growth; while loan impairment charges ballooned by 267.35%.

Gross earnings for the period stood at N273.565bn, a slight increase from N268.01bn in the corresponding period of last year; helped by interest income of N228.226bn, up from the previous N224.187bn; while interest expense dropped by N12.76bn or 24.89% to N38.49bn from N51.25bn.

Loan impairment charges for the period soared by N7.383bn from N2.761bn to N10.144bn; resulting in net interest income after loan impairment charges of N179.591bn, up from N170.175bn.

Fee and commission income dropped by N10.978bn or 22.69% from N48.379bn to N37.4bn, a breakdown of which showed that credit related fees and commission dropped from N8.078bn to N4.585bn; account maintenance charges improved slightly from N8.54bn to N9.544bn; corporate finance fees fell from N4.332bn to N1.648bn. E-business income fell from N11.039bn to N8.205bn; commission on foreign exchange deals stood at N4.731bn from N5.454bn; commission on touch points, N1.199bn from N1.348bn; while revenue from account services, maintenance and ancillary banking  charges dropped to N2.454bn from N4.862bn; and transfer related charges from N2.3bn o N2.909bn.

Fee and commission expense soared to N4.674bn from N1.881bn, lifted by bank charges of N2.959bn from N1.142bn, while loan recovery expenses rose from N739.423m to N1.715bn. Net fee and commission income, therefore, slipped by N15.653bn or 33.66% from N46.497bn to N32.725bn.

Net gains on financial instruments held at fair value through profit or loss stood at N18.987bn from N9.643bn, the lion’s share of which was the N12.103bn from foreign exchange trading gain, up from N3.998bn. Other income improved marginally from N43.823bn to N45.339bn, lifted by the N21.622bn from foreign exchange revaluation gain, up from N12.425bn.

Net impairment reversal on other financial assets soared from N110.63m to N3.108bn; personnel expenses rose slightly to N28.719bn from N27.299bn; just as right-of-use asset amortization dropped from N2.131bn from N2.037bn. Depreciation and amortization jumped from N15.519bn to N21.571bn; other operating expenses rose from N54.648bn to N60.072bn, with AMCON expenses accounting for N17.2bn, as against the previous N15.486bn.

Profit before tax dropped from N170.651bn to N167.351bn; income tax expense increased to N25.068bn from N23.661bn; leaving profit after tax at N142.283bn, as against the N146.989bn of the previous nine months. This translated to Earnings Per Share of N5.02, down from N5.19 each.