GTCO reports N1trn profit, net income grows by 161% in 9 months
Guaranty Trust Holding Company (GTCO), a tier-one bank in Nigeria has reported an after-tax profit of N1.08 trillion in the nine months of 2024 driven by interest income.
According to data from the Nigerian Exchange Group (NGX), GTCO’s interest income grew by 161 percent to N980 billion, compared to N374.5 billion during the same period in 2023.
The rise in interest income is attributed to increased average earning assets and a rise in average yields, analysts at CSL Stockbrokers disclosed.
It added that net loans and advances to customers grew 21.8 percent in the first nine months of 2024 on the impact of the devaluation of foreign currency loans.
The holding company’s expenses also increased, reflecting broader economic pressures. Interest expenses surged by 158.2 percent to N198.9 billion, while customer deposits experienced a moderate rise of 44.1 percent. Consequently, GTCO reported a net interest income of N781.5 billion, a 162.6 percent increase from N297.5 billion in the same period last year.
GTCO saw growth in its fees and commission revenue, which increased by 97.3 percent to N180.2 billion from N91.3 billion in 2023. This growth was largely driven by a 53.7 percent increase in e-business income, which represented over a quarter of the total fees and commissions. Account maintenance charges and ancillary banking services contributed further, surging by 62.7 percent and 217 percent, respectively.
Despite this positive performance, the holding company reported an impairment loss on financial instruments totaling N63.9 billion, down from an impairment write-back of N148.6 billion. Additionally, the bank faced a loss in foreign exchange revaluation, recording an unrealized FX loss of N1.7 billion, a stark contrast to the N92.2 billion gain it recorded in the same period last year.
GTCO saw growth in its fees and commission revenue, which increased by 97.3 percent to N180.2 billion from N91.3 billion in 2023. This growth was largely driven by a 53.7 percent increase in e-business income, which represented over a quarter of the total fees and commissions. Account maintenance charges and ancillary banking services contributed further, surging by 62.7 percent and 217 percent, respectively.
Despite this positive performance, the holding company reported an impairment loss on financial instruments totaling N63.9 billion, down from an impairment write-back of N148.6 billion. Additionally, the bank faced a loss in foreign exchange revaluation, recording an unrealized FX loss of N1.7 billion, a stark contrast to the N92.2 billion gain it recorded in the same period last year.
Operating expenses rose sharply, growing 61.1 percent to N297.4 billion due to increased energy costs and inflationary pressures affecting the Nigerian economy. Nonetheless, GTCO saw a 65.9 percent rise in other income, primarily driven by unrealized fair value gains on financial instruments, which totaled N523.2 billion.
The holding company’s robust cash generation reflects its strong operational efficiency, with net cash flow from operating activities reaching N1.87 trillion, an increase from N88 billion in 2023.
However, GTCO recorded a negative cash flow from investing activities, totaling N1.14 trillion, due to investments in securities and property acquisitions. Financing activities saw net inflows of N122.1 billion, largely due to proceeds from borrowings, which offset dividend payments and other liabilities.
During the year, the holding company paid dividends totaling N79.4 billion, repaid borrowings and lease liabilities of N45.1 billion and N6.5 billion respectively. It also received proceeds from borrowings amounting to N254 billion thereby bringing net cash flow from financing activities to N122.1 billion in 9M’24.
Consequently, cash and cash equivalents for the period surged by 102.8 percent to N4.28 trillion from N2.11 trillion.
Its loans and advances grew by 46.1 percent to N3.2 trillion from N2.19 trillion, thereby bringing total assets to N15.6 trillion.
Deposits and current accounts were up 49.7 percent to N6.65 trillion from N4.44 trillion while total shareholders’ funds grew by percent to N2.63 trillion as against N1.63 trillion.
