Amid challenges in banking sector, GTCO gains momentum, PBT, Asset

By Philemon Adedeji

Guaranty Trust Holding Company (GTCO), for its audited and consolidated and separate financial statements for the period ended June 30, 2022 released to the Nigerian Exchange Group (NGX). The group reported an impressive performance in gross earnings despite inflation rate and other numerous challenges facing the banking sector.

According to the analysis of the results reveals that the group  gross earnings grew significantly by a remarkable 15 per cent to N239.288 billion in H1 2022 from N207.914 billion reported in H1 2021, driven by 13 per cent increase in net-interest income. The group audited half year results reveals a significant  improvement across key performance indicators, The growth in gross earnings means the sales figures grew better than it did in the half year 2021.

The Group  Profit Before Tax stood at N103.2 billion in  H1 2022, representing an increase of 11.0 per cent over N93.1 billion recorded in the corresponding period ended June 2021. The Group’s loan book (net) increased by 1.8 per cent from N1.80 trillion recorded as at December 2021 to N1.83 trillion in June 2022 while deposit liabilities increased by 6.4 per cent from N4.13 trillion in December 2021 to N4.39 trillion in June 2022.

Profit After Tax (PAT) deployed by the group for H1 2022 stood at N77.557 billion from N79.414 billion deployed in H1 2021, representing a marginal decrease of 2.34 per cent.

Net interest income after loan impairment charges grew by 14.64 per cent to N117.329 billion in  2022 from N102.340 billion in  2021.

Fee and commission income rose by 21.41 per cent to N46.479 billion in H1 2022 from N38.284 billion in accounted in H1 2021.As Fee and commission expenses grew by 370 per cent to N6.713 billion in from N1.428 billion in H1 2021, As Other income declined by 14.86 per cent to N22.011 billion from N25.853 billion the previous year

Interest income calculated using the effective interest method rose by 15.5 per cent to N134.985 billion in H1 2022 from N116.864 billion recorded in the H1 2021.

Deposits from customers grew by 233.9 per cent to N364.7 billion in H1 2022 from N109.2 billion deposit accounted in H1 2021, while deposits from banks rose significantly by 37.7 per cent from N25.2 billion in corresponding year 2021 to N34.730 billion in H1 2022

Earnings per share (EPS) reported during the period  declined slightly nearly a 3 per cent to 2.70 kobo  in H1 2022 from 2.79 kobo achieved in H1 2021

According to the group, during the period under review, Directors proposed the payment of an interim dividend in the sum of 30 Kobo per ordinary share on the issued capital of 29,431,179,224 Ordinary Shares of 50 Kobo each payable to Shareholders on the register of shareholding at the closure date.

Withholding tax will be deducted at the time of payment. There was no income tax consequence on the Company as a result of the dividend pay-out, as the Company is only required to deduct this tax at source on behalf of Tax authorities in Nigeria. The tax so withheld represents an advance payment of income tax by the recipient shareholders.

The Group’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at N5.7 trillion and N845.7 billion, respectively. Full Impact Capital Adequacy Ratio (CAR) stayed very strong, closing at 22.0 per cent, while asset quality was sustained as IFRS 9 Stage 3 Loans ratio and Cost of Risk (COR) closed at 6.2 per cent and 0.2 per cent in June 2022 from 6.0 per cent and 0.5 per cent in December 2021, respectively

PROFITABILITY RATIOS

From the analysis, it shows that, A leading financial institution recorded profitability for the half year 2022, However when compared to its preceding year results, almost all   the parameters are on upward trajectory.

Firstly to achieved profit margin of the bank, declining slightly to 43.2 per cent in H1 2022 from 44.7 per cent in H1 2021.This simply means that for every N100 earned by the bank in the course of the year N43.20 can be translated into profit, lower than N44.70 in the prior-year.

Commenting on the results, the Group Chief Executive Officer of Guaranty Trust Holding Company Plc (GTCO Plc), Mr. Segun Agbaje, said; “Our results show an increase in key revenue lines and a strong performance in other financial metrics which reinforce our growth prospects as a leading financial services company. Our priority at the start of the 2022 financial year was to bring the Group’s new businesses on-stream, starting strong with a focus on long-term viability. At present, we have successfully expanded our financial services ecosystem to include HabariPay Ltd, Guaranty Trust Fund Managers Ltd, and Guaranty Trust Pension Managers Ltd, and all of them are P&L positive.”

He further stated that, “These newly created businesses will operate alongside our flagship banking franchise to offer increased value to our growing customer base as well as other stakeholders. We will continue to build on our core strengths of service excellence, innovation, and flawless execution to deliver our corporate objectives for the year and further our vision of being Africa’s leading financial services institution.”

Overall, the Group continues to post one of the best metrics in the Nigerian Financial Services industry in terms of key financial ratios i.e., Pre-Tax Return on Equity (ROAE) of 23.9 per cent, Pre-Tax Return on Assets (ROAA) of 3.7 per cent, Full Impact Capital Adequacy Ratio (CAR) of 22.0 per cent and Cost to Income ratio of 49.1 per cent

GTCO Plc is a fully-fledged financial services group with banking operations across West and East Africa and the United Kingdom as well as non-banking businesses in several key industry segments including Payment, Funds Management and Pension Fund Management. With N5.7trillion in assets and over 28 million customers, the Group remains one of the most profitable and best managed financial services companies out of Nigeria providing commercial banking services and non-banking financial services across eleven countries.

Its leadership in the banking industry and efforts at empowering people and communities has earned it many prestigious awards over the years including Best Banking Group in Nigeria and Most Innovative Bank in Nigeria at the 2022 World Finance Banking Awards. It also retained its position as Africa’s Most Admired Financial Services Brand in the 2022 ranking of The Brand Africa 100: Africa’s Best Brands.