Money market

GTBank leads banking industry in lowest cost-to-income ratio

Story by Kayode Tokede

Guaranty Trust Bank plc is leading the banking industry in lowest Cost-to-Income (CIR), investigation by Nigerian NewsDirect has revealed.

For the half year ended June 30, 2019, GTBank reported 37.63 per cent as against 38.82 per cent reported in H1 2018 and 37.09 per cent in 2018 full year result and accounts.

According to the bank, the consistent application of cost optimization strategies assisted in curtailing operating expenses growth at 0.4 per cent well below inflation rate of 11.22 per cent.

” The outcome of the various cost initiatives adopted across the group led to 119 basis points improvement in cost to income ratio from 38.8 per cent in H1 2018 to 37.6 per cent in H1 2019,” GTBank explained.

For Zenith Bank, it reported improved  cost to income ratio from 53.9 per cent to 53.2 per cent in H1 2019,  drive towards cost optimization yielded positive results as total operating expenses increased by one per cent while to cost-to-income ratio.

“The group is committed to maintaining an improved level of operating efficiency,” the lender explained in a statement.

Interesting, Access Bank’s Cost to income ratio stood at 61 per cent in H1 2019 from 64.9 per cent in H1 2018.

The Chief Financial Officer, Access Bank, Mr. Seyi Kumapayi, said, the combined expenses of the merged bank with Diamond Bank continued to impact on the group cost-to-income ratio.

“So we have increased number of branches and increased staff. Now, what you will find is that it has only been three months, so in terms of optimisation of staff and branches we have not even started. So when that happens the top line will increase and therefore the cost to income ratio will naturally come down to the levels that we projected in the financials,” he explained.

Fidelity Bank reported 72.8 per cent Cost to Income ratio from 71.1 per cent reported in full year ended December 31, 2018, while FBN Holdings’ Cost to income ratio stood at 70.5 per cent in H1 2019 from 56.5 per cent in H1 2018.

According to the bank, operating expenses grew by 16.9 per cent to N38.2 billion, driven by the following cost lines staff (NDIC , AMCON, Advert) which accounted for over 77 per cent of the cost growth for H1 2019. Increase in Cost to income was above our guidance for the year and we intend to work the ratio lower in line with our guidance in subsequent quarters.”

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