GTCO delivers 217% profit growth in H1’23 to N327bn

By Onome Amuge.

Guaranty Trust Holding Company (GTCO), Nigeria’s largest bank by market capitalisation, booked a record half-year profit for the year to June as profit before tax (PBT) rose 217.09 per cent to N327.40 billion from N103.25 billion reported in the corresponding first half of June 2022.

The leading financial services group made the disclosure in its  audited consolidated and separate financial statements for the period ended June 30,2023,filed to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE).

The reviewed period was also marked by a vast expansion in foreign exchange revaluation which rose to  N357.47 billion. Business A.M gathered that GTCO, whose flagship banking division has a chunk of its loans denominated in the US dollar, benefitted enormously from the weakening of the naira in June following the naira float policy by the President Tinubu administration. This enabled repayments on the bank’s dollar credit to surge in local currency,consequently boosting revenue and profit.

Furthermore, GTCO announced a 261.63 per cent increase in profit after tax (PAT) which advanced to N280.48 billion H1 2023 from N77.56 billion in H1 2022.

Gross earnings soared 181 per cent to N672.6 billion, with the corporate banking unit accounting for 68.9 per cent of revenue. Net interest income scaled up 46.8 per cent to N177.5 billion, while earnings per share (EPS) surged to N9.94 from N2.70.

GTCO  maintained a positive result in its loan book (net) which increased by 22.8 per cent from N1.89 trillion recorded as of December 2022 to N2.32trillion in June 2023, while deposit liabilities scaled up 37.0 per cent from N4.61trillion in December 2022 to N6.32 trillion in June 2023.

The holdco also noted that its balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at N8.5trillion and N1.2 trillion, respectively.

Similarly, full impact capital adequacy ratio (CAR) remained very strong, closing at 24.7 per cent, while asset quality was sustained as IFRS 9 Stage 3 loans advanced 4.6 per cent in June 2023 from 5.2 per cent in December 2022.

However, cost of risk (COR) closed at 3.7 per cent from 0.6 per cent in December 2022 owing to worsening macros which caused a significant increase in expected credit losses (ECL) variables.

With the significant increase in profits, the management of GTCO declared N0.50 per share interim dividend in H1 2023 as against N0.30 per share declared in H1 2022.

Commenting on the results, Segun Agbaje, the Group chief executive officer of Guaranty Trust Holding Company Plc, said the half-year audited results reflect the strong business fundamentals underpinning the GTCO franchise, the quality of  past decisions in future-proofing its balance sheet for challenging times and the sound practices that guide the holdco’s day-to-day operations.

Agbaje noted that despite the challenges in the business environment, notably inflationary pressures, and exchange rate fluctuations, the company  is starting to see the gains in the transformation of its businesses following the transition to a Holding Company structure.

The CEO also pointed out that improved profitability and solid performance across key metrics reflect efficiencies and justify the investments GTCO continues to make in technology, product development and its people.

“We recognize the impact prevailing economic and market conditions have on people and livelihoods and we remain committed to seeking better outcomes for our customers, by ensuring that our products and service offerings support our customers and their businesses through their evolving realities, whilst also taking every opportunity to optimize stakeholder value,” he added.