…The Bank also reported a 185.3% y/y increase in EPS to N12.98 (9M-22: N4.55), supported by the sturdy growth across the group’s core (+61.1% y/y) and non-core (+231.1% y/y) income lines.
TUE, OCT 24 2023-theGBJournal|Guaranty Trust Holding Company Plc (GTCO) published its 9M-23 unaudited results today, reporting a 61.1% y/y growth in interest income to N374.56 billion, driven by the impressive income from key contributory lines.
In nominal terms, the GTCO group generated higher revenue from loans and advances to customers (+32.8% y/y to N212.30 billion), investment securities (+78.8% y/y to N112.51 billion), and placements with other banks (+414.1% y/y to N49.74 billion).
We highlight that the increase in income from investment securities was driven by the combined impact of elevated rates in the fixed-income market and increases in the Holdco’s investment securities (+52.8% YTD to N2.24 trillion).
The Bank also reported a 185.3% y/y increase in EPS to N12.98 (9M-22: N4.55), supported by the sturdy growth across the group’s core (+61.1% y/y) and non-core (+231.1% y/y) income lines.
Meanwhile, interest expense surged by 79.9% y/y to N77.02 billion, triggered majorly by the elevated interest rate environment which passed through to increased funding costs.
As a result, the Holdco’s interest costs on customers’ deposit holdings rose by 76.9% y/y to N3.53 billion despite the improvement in its funding mix – (CASA 9M-23: 98.7% vs FY-22: 87.1%).
At the same time, costs of borrowing advanced by 48.9% y/y to N2.98 billion. Consequently, the net interest income rose by 56.9% y/y at N297.54 billion.
Eventually, the net interest income (ex-LLE) settled 11.9% y/y higher to N208.07 billion, following the loan impairment charges (N89.46 billion) taken in the period.
Non-interest income (NII) grew by 231.1% y/y to N407.83 billion, spurred primarily by the revalution gains of about N306.96 billion recorded in Q2-23 (Q3-23: N49.35 billion | 9M-22: N334.35 billion).
Aside from revaluation gains, the rise in the income generated from fees and commission (+41.5% y/y to N82.48 billion) was sufficient to outweigh losses in investment securities trading (-N55.62 billion).
This expansion in NII, alongside the growth in net interest income, led to a 99.2% y/y increase in operating income to N615.90 billion.
Further down, GTCO’s operating expenses grew by 31.0% y/y to N182.70 billion, with the most pressure stemming from personnel expenses (+23.0% y/y to N37.58 billion), deposit insurance premium (+18.1% y/y to N12.69 billion), and AMCON levy (+17.8% y/y to N27.43 billion).
Nonetheless, the group maintained impressive operational efficiency as the cost-to-income ratio (ex-LLE) settled at 29.7% (9M-22: 45.1%).
Overall, profit before tax advanced by 155.2% y/y to N433.20 billion, while profit after tax grew faster by 181.9% y/y to N367.42 billion, after accounting for N65.79 billion income tax expense.
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