GTCO Plc Reports 686% 2024Q1 Net Profit Growth, In Aftermath Of HoldCo Adoption

Guaranty Trust Holding Company Plc (GTCO or the Group), at the weekend released its unaudited Consolidated and Separate Financial Statements for the first quarter ended March 31, 2024, highlights of which were the significant growth in key parameters such as profit, loan book and deposit base, in what Segun Agbaje, the Group Chief Executive said reflects the unfolding values created in all its business segments by the decision to adopt the holdco structure.

According to the result presented to the Nigerian Exchange Group (NGX) and London Stock,  Exchange (LSE), gross earnings for the period grew from N158.09bn to N680.38bn, representing a 330.37%, as Net Interest Income rose from N82.151bn to N227.3bn. Loan impairment charges increased to N13.487bn from N3.442bn; resulting in net interest income after loan impairment charges stood at N213.812bn from N78.708bn. Fee and commission income increased to N55.989bn from N32.429bn; while fee and commission expense inched from N2.492bn to N3.738bn.

Net trading gains on financial instruments held at fair value through profit and loss increased to ₦17.794bn from N10.628bn; while other income soared from N10.955bn to ₦324.941bn. Personnel expenses rose from ₦10.39bn to ₦22.277bn; depreciation and amortisation from N9.381bn to ₦13.885bn; just as other operating expenses closed at N63.165bn from N36.366bn.

Profit before tax, therefore amounted to ₦509.348bn, representing an increase of 587.5% over ₦74.089bn recorded in the corresponding period ended March 2023; income tax expense also jumped from N15.922bn to ₦52.213bn; leaving profit after tax at ₦457.134bn, up from ₦58.167bn. This translated to Earnings Per Share of ₦16.24, compared to the previous ₦2.04 each.

The Group’s loan book (net) increased by 21.9% from ₦2.48tr recorded as at December 2023 to ₦3.02tr in March 2024, while deposit liabilities increased by 26.0% from ₦7.55tr in December 2023 to ₦9.51tr in March 2024.

A statement by the group assured that it “balance sheet remained well structured, diversified, and resilient with total assets and shareholders’ funds closing at ₦13.0trillion and ₦2.0trillion, respectively. Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 24.9%, while asset quality was sustained as IFRS 9 stage 3 loans improved to 3.1% in March 2024 from 4.2% December 2023 and cost of risk (COR) closed at 0.4% from 4.5% in December 2023.

Commenting on the results, the Group Chief Executive Officer, Segun Agbaje, said: “Our first quarter results reflect the unfolding value of what we have created in all our business verticals through the Holding Company Structure – from Banking and Payments to Funds Management and Pension.

“We are positioned to compete effectively on all fronts and fulfil all our customers’ needs under a unified, thriving financial ecosystem. Despite the challenging operating environment, we delivered a solid performance, recording significant growth across all financial and non-financial metrics, and we remain on track to meeting our full year guidance,” he added.

Agbaje further said: “Looking ahead, we will continue to focus on strengthening our relationships with our loyal customers, supporting not just individuals and businesses but also our communities through our well-attested free business platforms as well as innovative products and services. We are confident in our credentials to lead the future of financial services in Africa and will not relent in our commitment to excellence whilst delivering long-term value to all stakeholders.”

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 117.0%, pre-tax return on assets (ROAA) of 18.0%, full impact capital adequacy ratio (CAR) of 24.9% and cost-to-income ratio (CIR) of 16.3%.