GTCO Profit Declines by 15% in Q1 2026
Guaranty Trust Holding Company’s (GTCO) net profit slipped more than 15% to N218 billion at the end of the first quarter of 2026, from N259.9 billion posted in the equivalent period in 2025.
The financial services company’s bottom line tightened while gross earnings expanded by 8.8% year on year to N560.90 billion at the end of Q1 2026 from N515.4 billion.
The profit slumped due to higher tax expense and expanded operating expenses, alongside a 20.4% year-on-year decline in Non-Interest Revenue (NIR).
The net interest income surged 12% to N356.3 billion in Q1, though interest expenses or funds paid to providers of funds grew faster at 39.7% than 17.5% surge in interest income.
In its note, CardinalStone Securities Limited notice that GTCO’s core performance was primarily driven by higher income from cash and cash equivalents (+30.5% YoY) and loans to customers (+24.8% YoY), reflecting a 23.3% expansion in Interest Earning Assets (IEA) to N13.4 trillion.
GTCO’s funding costs rose by 39.7% year on year to N110.7 billion, largely driven by a 21.3% year-on-year expansion in customer deposits to N13.2 trillion.
Its unaudited financials also revealed a 6.4 percentage point moderation in the current and savings account (CASA) ratio to 82.4%. Higher funding costs eventually tightened the group’s Net-Interest Margin (NIM), falling by 1.3 percentage points to 11.0%.
In Q1, GTCO’s non-interest revenue dipped by 20.4%, pressured by unrealised fair value loss of N40.4 billion, which masked the 30.5% growth in net foreign exchange realised trading gains.
Consequently, operating income increased by a marginal 3.2% year on year to N450.2 billion. In the period, impairment charges declined by 40.0%, reflecting a 6.5% YoY decline in Non-Performing Loans (NPL) to N142.7 billion.
This suggests improved balance sheet quality. A lower impairment charge suggests asset quality improved, as confirmed by a slight slowdown in the non-performing loan ratio to 4.4% from 4.5%.
GTCO recorded lower tax-exempt income in the period under review. Income tax expenses grew by 100.2% year on year to N84.8 billion in Q1 2026 from N42.3 billion in the equivalent period in 2025.
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