GTCO Nets ₦77.557bn Half-Year Profit, Offers N0.30 Dividend

Guaranty Trust Holding Company Plc, on Monday released its audited consolidated and separate financial statements for the period ended June 30, 2022, to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE), with highlights such as the faster growth in interest expenses than income, among others, just as income tax expenses soared by 88.34%, resulting in a profit after tax of N77.557bn.

The board also offered a dividend of 30 kobo per 50 kobo ordinary share to those on the register of members as of Tuesday, September 20, and Monday, September 12, 2022, for holders of the group’s Global Depository Receipts (GDR). The dividend is scheduled for payment electronically on Friday, September 30, 2022.

Interest income for the period rose to ₦147.199bn, from ₦126.091bn in the corresponding period of last year; while interest expense rose by ₦7.315bn to ₦26.351bn from ₦19.035bn; following which net interest income stood at ₦120.848bn, compared to ₦107.055bn in the first half of 2021.

Loan impairment charges dropped from ₦4.714bn to ₦3.519bn; resulting in a net interest income after loan impairment charges of N117.329bn from ₦102.34bn.

Fee and commission income increased from ₦38.284bn, boosted by e-business income of ₦10.977bn, from ₦10.497bn; and the ₦9.436bn from account maintenance charges, compared to the previous ₦7.802bn; while expense soared to ₦6.713bn from ₦1.428bn; resulting from the ₦4.463bn bank charges, up from ₦909.25m; and loan recovery expenses, which jumped from ₦519.678m to ₦2.25bn. Net fee and commission income, therefore stood at ₦39.765bn, compared to the ₦36.855bn. Net trading gains on financial instruments held at fair value through profit or loss rose to ₦23.598bn, from ₦17.685bn, boosted by the ₦20.516bn which rose from the previous ₦15.31bn; other income dropped to ₦22.011bn from ₦25.853bn; personnel expenses stood at ₦18.539bn, up from ₦17.234bn. Depreciation and amortization dropped marginally from ₦17.761bn to ₦17.345bn; while other operating expenses rose from ₦54.34bn in the first half of 2021 to ₦63.569bn.

These left the group’s profit before tax at ₦103.2bn, representing an increase of 11.0%, over ₦93.1bn recorded in the corresponding period ended June 2021; while income tax expense jumped from ₦13.641bn to ₦25.692bn; following which Earnings Per Share stood at ₦2.77, compared to the previous ₦2.79 each.

The group’s loan book (net) increased by 1.8% from ₦1.80tr recorded as at December 2021 to ₦1.83tr in June 2022, while deposit liabilities increased by 6.4% from ₦4.13tr in December 2021 to ₦4.39tr in June 2022.

The group’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at ₦5.7tr and ₦845.7bn, respectively. Full Impact Capital Adequacy Ratio (CAR) stayed very strong, closing at 22.0%, while asset quality was sustained as IFRS 9 Stage 3 Loans ratio and Cost of Risk (COR) closed at 6.2% and 0.2% in June 2022 from 6.0% and 0.5% in December 2021, respectively.

Commenting, the Group Chief Executive Officer, Segun Agbaje, said the “results show an increase in key revenue lines and a strong performance in other financial metrics which reinforce our growth prospects as a leading financial services company. Our priority at the start of the 2022 financial year was to bring the Group’s new businesses on-stream, starting strong with a focus on long-term viability. At present, we have successfully expanded our financial services ecosystem to include HabariPay Ltd, Guaranty Trust Fund Managers Ltd, and Guaranty Trust Pension Managers Ltd, and all of them are P&L positive.”

He further stated that, “These newly created businesses will operate alongside our flagship banking franchise to offer increased value to our growing customer base as well as other stakeholders. We will continue to build on our core strengths of service excellence, innovation, and flawless execution to deliver our corporate objectives for the year and further our vision of being Africa’s leading financial services institution.”

Overall, the Group continues to post one of the best metrics in the Nigerian Financial Services industry in terms of key financial ratios i.e., Pre-Tax Return on Equity (ROAE) of 23.9%, Pre-Tax Return on Assets (ROAA) of 3.7%, Full Impact Capital Adequacy Ratio (CAR) of 22.0% and Cost to Income ratio of 49.1%.

A statement by the group added that with the ₦5.7tr of GTCO in assets and over 28 million customers, it “remains one of the most profitable and best managed financial services companies out of Nigeria providing commercial banking services and non-banking financial services across eleven countries. Its leadership in the banking industry and efforts at empowering people and communities has earned it many prestigious awards over the years including Best Banking Group in Nigeria and Most Innovative Bank in Nigeria at the 2022 World Finance Banking Awards. It also retained its position as Africa’s Most Admired Financial Services Brand in the 2022 ranking of The Brand Africa 100: Africa’s Best Brands.”