TUE SEPT 23 2025-theGBJournal| Guaranty Trust Holding Company Plc (GTCO) Tuesday, reported a 50.4% y/y contraction in PAT to N449.01 billion (H1-24: N905.57 billion).
The weak earnings performance, reported in its H1-25 financial results, was weighed by the steep decline in non-interest income and higher operating costs, undermining the 31.5% y/y core earnings growth.
”GTCO’s H1-25 results reflect the impact of naira stability, which curtailed fair value gains and weighed on non-core income,” Cordros Research said in a note to theG&BJpournal.
The Board proposed an interim dividend of NGN1.00/s (H1-24: N1.00/s), representing a dividend yield of 1.1% based on the last closing price of N93.00/s.
The group recorded a 31.5% y/y increase in interest income to NGN812.36 billion, supported by stronger contributions from investment securities (+43.6% y/y to N382.87 billion), loans to customers (+22.8% y/y to N297.49 billion), and cash and balances with banks (+22.6% y/y to NGN129.86 billion).
The performance is attributed to the elevated interest rate environment and modest expansion in key earning assets – investment securities (+15.6% YTD to N4.79 trillion) and loans to customers (+20.5% YTD to N3.36 trillion).
Interest expenses rose by 42.5% y/y to N180.12 billion, reflecting higher costs on customer deposits (+44.2% y/y) and borrowings (+39.2% y/y).
Nonetheless, net interest income ex-LLE grew by 38.6% y/y to N615.37 billion, aided by lower net impairment charges (-64.4% y/y to N16.87 billion).
Elsewhere, non-interest income declined sharply (-68.0% y/y to N244.02 billion). This was driven by the fair value loss of N4.44 billion compared to the gain of N493.02 billion recorded in the prior period.
The preceding offset gains from fees and commissions (+33.7% y/y to N135.17 billion) and securities trading (+106.6% y/y to N10.42 billion), resulting in a 28.7% y/y contraction in operating income to N859.39 billion.
Operating expenses increased by 27.9% y/y to N258.49 billion, driven by higher personnel expenses (+31.1% y/y), AMCON levy (+38.7% y/y), and depreciation (+39.1% y/y). As a result, the cost-to-income ratio deteriorated to 30.1% (H1-24: 16.8%).
Overall, profitability was significantly weaker, with profit before tax (PBT) declining by 40.1% y/y to N600.90 billion and profit after tax (PAT) halving (-50.4% y/y) to N449.01 billion.
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