…Profit before tax advanced by 107.8% y/y to N1.27 trillion
…Profit after tax grew by 88.6% y/y to N1.02 trillion)
SAT MARCH 29 2025-theGBJournal| Guaranty Trust Holding Company Plc (GTCO) Friday, reported a 143.6% y/y growth in interest income to N1.34 trillion, driven by higher income from key contributory lines.
In nominal terms, the group generated higher revenue from investment securities (+228.8% y/y to N599.32 billion) and loans & advances to customers (+75.2% y/y to N509.25 billion), placements with other banks (+242.5% y/y to N226.83 billion), which was sufficient to offset the decline in income from loans and advances to banks (-44.7% y/y).
The increase in funded income was driven by the combined impact of elevated rates in the fixed income market and increases in the HoldCo’s earning assets (+59.9% y/y to NGN11.61 trillion).
Consequently, earnings yield increased significantly by 397bps to 11.6%. However, non-performing loan ratio increased to 4.9% (2023FY: 4.2%), primarily due to the exchange rate impact on the group’s FCY-denominated loans.
GTCO also reported a net profit of N1.02 trillion (2023FY: N539.65 billion), translating to an earnings per share of N35.44 (2023FY: N19.07).
The group’s performance was driven by the sturdy growth in both interest (+143.6% y/y) and non-interest (+42.1% y/y) income lines.
Notably, the board proposed a final dividend of N7.03/share (2023FY: N2.70/share), translating to a dividend yield of 10.9% based on the last closing price of N64.25/share (27 March), bringing the total dividend for 2024FY to N8.03/share (2023FY: N3.20/share).
Elsewhere, interest expense surged by 148.3% y/y to N283.22 billion, primarily driven by the elevated interest rate in the environment, which led to increased funding costs.
Accordingly, the Holdco’s interest cost on customers’ deposit holdings rose by 114.5% y/y to N220.47 billion, driven by deterioration in the group’s funding mix (CASA 2024FY: 83.6% vs FY-23: 88.6%).
At the same time, borrowing costs grew by 543.5% y/y to N47.34 billion. Consequently, the net interest income rose by 142.4% y/y to N1.59 trillion. Ultimately, the net interest income (ex-LLE) settled 176.2% y/y higher at N921.92 billion, following an increase in loan impairment charges (+32.7% y/y to N136.66 billion).
Non-interest income (NII) grew by 42.1% y/y to N747.36 billion, spurred primarily by the fair value gains on financial instruments (+16.7% y/y to N515.55 billion).
Aside from the fair value gains, the rise in the income generated from net fees and commission (+73.4% y/y to N189.71 billion) and FX trading (+31.1% y/y to NGN76.83 billion) further supported the income line.
The expansion in NII, alongside the growth in net interest income, led to a 94.2% y/y increase in operating income to N1.67 trillion.
Further down, GTCO’s operating expenses grew by 60.9% y/y to N403.03 billion, with pressure stemming from personnel expenses (+89.4% y/y to N85.40 billion), technological costs (+48.4% y/y to N88.04 billion), and AMCON levy (+34.2% y/y to N36.66 billion).
Nonetheless, the group maintained impressive operational efficiency, with the cost-to-income ratio (ex-LLE) settling at 24.2% (2023FY: 29.1%).
Overall, profit before tax advanced by 107.8% y/y to N1.27 trillion, while profit after tax grew by 88.6% y/y to N1.02 trillion), after accounting for the income tax expense of N248.44 billion – Windfall tax (N51.25 billion).
Following the substantial transfer to retained earnings (+N910.08 billion), the group’s capital adequacy ratio (CAR) increased precipitously to 39.3% (2023FY: 21.9%), marking the highest level in the industry.
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