GTCO Profit Grows by 89% to N1.02trn, Declares N7.03 Dividend
Guaranty Trust Holding Company Plc (GTCO) grew profit by about 89% year on year on 2024 to N1.02 trillion from N539.65 billion in 2023. The mouth-watering earnings performance was driven by the strong growth in both interest and non-interest income lines.
Hence, the group earnings per share printed at N35.44 in 2024 following its impressive performance from N19.07 in 2023. The board proposed a final dividend of N7.03/share, a significant 160% increase from N2.70 paid in 2023. This bring the total dividend for 2024 to N8.03/share from N3.20/share in 2023.
According to its audited financial statement, GTCO reported a 143.6% year on year growth in interest income to N1.34 trillion, driven by higher income from key contributory lines. The breakdown of the numbers showed that group generated higher revenue from investment securities, up by 228.8% to N599.32 billion and loans & advances to customers rose by 75.2% to N509.25 billion.
Income from placements with other banks climbed by242.5% to N226.83 billion, which was sufficient to offset the 44.7% decline in income from loans and advances to banks.
Analysts at Cordros Capital highlighted that the increase in funded income was driven by the combined impact of elevated rates in the fixed income market and increases in the HoldCo’s earning assets, up by 59.9% to N11.61 trillion.
Consequently, earnings yield increased significantly by 397bps to 11.6%. However, non-performing loan ratio increased to 4.9% from 4.2%, primarily due to the exchange rate impact on the group’s foreign currency denominated loans.
Further details revealed that the group interest expense surged by 148.3% to N283.22 billion, primarily driven by the elevated interest rate in the environment, which led to increased funding costs.
Accordingly, the Holdco’s interest cost on customers’ deposit holdings rose by 114.5% year on year to N220.47 billion, driven by deterioration in the group’s funding mix. Current and Savings Accounts mix fell to 83.6% in 2024 from 88.6% in 2023.
At the same time, borrowing costs grew by 543.5% to N47.34 billion.
The result revealed that Non-interest income (NII) grew by 42.1% to N747.36 billion, spurred primarily by the fair value gains on financial instruments, up by 16.7% to N515.55 billion.
Analysts said aside from the fair value gains, the rise in the income generated from net fees and commission and FX trading further supported the income line.
In the period, net fee and commission income surged by 73.4% to N189.71 billion, FX trading saw 31.1% year on year spike to settle at N76.83 billion
The expansion in non-interest income, alongside the growth in net interest income, led to a 94.2% year on year increase in operating income which settle at N1.67 trillion.
Further down, GTCO’s operating expenses grew by 60.9% to N403.03 billion, with pressure stemming from personnel expenses, technological costs and AMCON levy.
The numbers revealed that personnel expenses grew by 89.4% year on year to N85.40 BILLION, Technological costs rose by 48.4% to N88.04 billion and AMCON levy expanded by 34.2% to N36.66 billion.
Overall, profit before tax advanced by 107.8% to N1.27 trillion, while profit after tax grew by 88.6% to N1.02 trillion, after accounting for the income tax expense of N248.44 billion.
Following the substantial transfer to retained earnings totalling N910.08 billion, the group’s capital adequacy ratio (CAR) increased precipitously to 39.3% from 21.9%, marking the highest level in the industry. #GTCO Profit Grows by 89% to N1.02trn, Declares N7.03 Dividend Neimeth Soars by 21% on Renew Interest in Pharma Stocks
