GTCO Profit Slumps Again
Guaranty Trust Holding Company Plc (GTCO) annual profit slumped 3.24% to N169.173 billion, according to detail from its audited financial statement for 2022.
Its latest published financial scorecard posted on the Nigerian Exchange showed that the holding company’s profit had printed higher at N174.839 billion.
The financial service company has continued to be facing earnings pressures since transitioning to a Holdco structure –with year on year decline in profitability.
In 2020, GTCO posted N201.439 billion as annual profit, it declined to N174.839 billion a year after before it settled much lower in 2022 at N169.173 billion.
Its faces pressures on investment securities and placements which attracted higher impairment charges in the financial year 2022.
GTCO expect steep credit losses on bonds carried at amortized costs, including a lifetime expected credit loss of N35.6 billion relating to group exposure to securities issued by the Ghanaian Government.
According to its financial statement, the group profit before tax settled at N214.2 billion, 3.3% below N221.5 billion posted in the corresponding year ended, December 2021.
The financial services boutique’s performance was impacted by impairment recognised on Ghanaian sovereign securities.
GTCO grew its net interest income by 17.54% to N259.303 billion amidst a high interest rate environment following monetary policy tightening that started in May, 2022 from N220.616 billion in 2021.
At the same time, it booked higher loan impairment charges due to asset quality deterioration, thus reducing the upside associated with income from interest-yielding assets.
According to its audited financials, GTCO’s impairment charge surged to N11.986 billion versus N8.531 billion in 2021.
Its bottom line was however supported by net fees and commission income reported, up by about 18% year on year to N75.457 billion from N65.65 billion in the comparable period.
While the group reported higher net trading gains and other income, specific impairment charges on other financial assets spiked strongly in 2022, to N35.944 billion from less than N761 million.
The impairment charge increase was related to fair value adjustment on GTCO’s investment securities portfolio in 2022. In 2022, loan books grew by 4.6% from N1.80 trillion in 2021 to N1.89 trillion while deposit liabilities grew by 11.6 per cent from N4.13 trillion to N4.61 trillion during the same period.
GTCO’s capital adequacy ratio settled at 24.1%, according to the audited results submitted to the regulators – the Nigerian Exchange, the Central Bank and the Securities Exchange Commission. Naira Steadies as Banks Issue Update on FX Purchase
