GTCO sets new profit record with N1.02trn earnings for 2024 FY

• Delivers windfall for shareholders with N8.03 total dividend

Bamidele Famoofo 

Segun Agbaje, Group CEO, Guaranty Trust Holding Company Plc

Guaranty Trust Holding Company Plc (GTCO) grew profit 88.4 percent year on year in 2024 to N1.02 trillion from N539.65 billion in 2023, representing the highest profit ever reported by the bank in its history. The mouth-watering earnings performance was driven by the strong growth in both interest and non-interest income lines.

Hence, the group earnings per share printed at N35.44 in 2024 following its impressive performance from N19.07 in 2023. The board proposed a final dividend of N7.03/share, a significant 160 percent  increase from N2.70 paid in 2023, bringing the total dividend for 2024 to N8.03/share from N3.20/share in 2023.

According to its audited financial statement, GTCO reported a 143 percent year on year growth in interest income to N1.34 trillion, driven by higher income from key contributory lines. The breakdown of the numbers showed that the group generated higher revenue from investment securities, up by 228.8 percent to N599.32 billion and loans & advances to customers rose by 75.2 percent  to N509.25 billion.

Income from placements with other banks climbed by 242.5 percent to N226.83 billion, which was sufficient to offset the 44.7 percent decline in income from loans and advances to banks.

Analysts at Cordros Capital highlighted that 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, up by 59.9 percent  to N11.61 trillion.

Consequently, earnings yield increased significantly by 397bps to 11.6 percent . However, non-performing loan ratio increased to 4.9 percent  from 4.2 percent , primarily due to the exchange rate impact on the group’s foreign currency denominated loans.

Further details revealed that the group interest expense surged by 148.3 percent  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 percent  year on year to N220.47 billion, driven by deterioration in the group’s funding mix. Current and Savings Accounts mix fell to 83.6 percent  in 2024 from 88.6 percent  in 2023.

At the same time, borrowing costs grew by 543.5 percent  to N47.34 billion.

The result revealed that Non-interest income (NII) grew by 42.1 percent to N747.36 billion, spurred primarily by the fair value gains on financial instruments, up by 16.7 percent  to N515.55 billion.

Analysts said aside from the fair value gains, the rise in the income generated from net fees and commission and FX trading further supported the income line.

In the period, net fee and commission income surged by 73.4 percent  to N189.71 billion, FX trading saw 31.1 percent  year on year spike to settle at N76.83 billion

The expansion in non-interest income, alongside the growth in net interest income, led to a 94.2 percent  year on year increase in operating income which settle at N1.67 trillion.

Further down, GTCO’s operating expenses grew by 60.9 percent  to N403.03 billion, with pressure stemming from personnel expenses, technological costs and AMCON levy.

The numbers revealed that personnel expenses grew by 89.4 percent  year on year to N85.40 billion, Technological costs rose by 48.4 percent  to N88.04 billion and AMCON levy expanded by 34.2 percent  to N36.66 billion.

Overall, profit before tax advanced by 107.8 percent  to N1.27 trillion, while profit after tax grew by 88.6 percent  to N1.02 trillion, after accounting for the income tax expense of N248.44 billion.

Following the substantial transfer to retained earnings totalling N910.08 billion, the group’s capital adequacy ratio (CAR) increased precipitously to 39.3% from 21.9 percent , marking the highest level in the industry.

Commenting on the results, Segun Agbaje, the group chief executive officer of Guaranty Trust Holding Company Plc, said; “Our strong performance for 2024 underscores the resilience and depth of our business, driven by a well-diversified earnings base across our banking and non-banking subsidiaries, all of which are P&L positive. Our capacity to generate sustainable high-quality earnings, maintain strong asset quality, and drive cost efficiencies reflects the soundness of our long-term strategy and disciplined execution. We have also prudently provided for all our forbearance loans, well ahead of the June 2025 timeline, whilst fully accruing for the windfall tax, further strengthening our balance sheet and enhancing financial resilience.

He added; “The total dividend of N8.03k for the 2024 FYE is underpinned by the quality of our earnings and is in line with our long tradition of increasing dividend pay-out year-on year. Looking ahead, we remain committed to building a Financial Services Group that thrives on innovation, operational efficiency, and sustainable profitability. We will continue to deepen our relationships with customers, leverage technology to deliver cutting-edge financial solutions, and accelerate the growth of all our business verticals—Banking, Funds Management, Pension, and Payments—to unlock new opportunities and create more value for our shareholders.”