The Oasis Reporters
September 2, 2023
Soon after GTCo released it’s half year 2023 report, Professor Ndubuisi Ekekwe @ndekekwe wrote:
“When Nigeria floated the Naira, I wrote that we will experience a season of massive bank profits because assets denominated in foreign currencies would appreciate on paper by more than 30%: “In the report, the company disclosed a profit before tax of N327.4 billion, marking a substantial growth of 217.1% compared to the N103.2 billion reported in the corresponding period concluding in June 2022.”
And dividends would be massive for shareholders because it would be money everywhere. Largely, this has nothing to do with any efficiency or productivity in the real economy. The current surge in banking valuations in NGX could be attributed to that optimism: profits would be made, and shareholders will see big credit alerts as dividends.
That said, I give Nigerian banks credit because the Naira redesign could have tripped many of them. They survived that moment and are now partying. Clap for a big bonus”.
Guaranty Trust Holding Company Plc (“GTCO” or the “Group”) has released its Audited Consolidated and Separate Financial Statements for the period ended June 30, 2023, to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE).
The group reported profit before tax of ₦327.4billion, representing an increase of 217.1% over ₦ 103.2 billion recorded in the corresponding period ended June 2022.
The Group’s loan book (net) Increased by 22.8% from ₦1.89trillion recorded as of December 2022 to ₦2.32trillion in June 2023, while deposit liabilities grew by 37.0% from ₦4.61trillion in December 2022 to ₦6.32trillion in June 2023.
The Group’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at ₦8.5trillion and ₦1.2 trillion, respectively.
Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 24.7%, while asset quality was sustained as IFRS 9 Stage 3 Loans improved to 4.6% in June 2023 from 5.2% in December 2022.
However, Cost of Risk (COR) closed at 3.7% from 0.6% in December 2022 owing to worsening macros which caused a significant increase in ECL variables.
Financial Stability and Quality Metrics
Commenting on the results, the Group Chief Executive Officer of Guaranty Trust Holding Company Plc (GTCO Plc), Mr. Segun Agbaje, said;
“Our half-year audited results reflect the strong business fundamentals underpinning the GTCO franchise, the quality of our past decisions in future-proofing our balance sheet for challenging times and the sound practices that guide our day-to-day operations.
Despite the challenges in the business environment, notably inflationary pressures, and exchange rate fluctuations, we are starting to see the gains in the transformation of our businesses following our transition to a Holding Company structure.
Improved profitability and solid performance across key metrics reflect efficiencies and justify the investments we continue to make in technology, product development and our people.
Adding further, he said;
“We recognize the impact prevailing economic and market conditions have on people and livelihoods and we remain committed to seeking better outcomes for our customers, by ensuring that our products and service offerings support our customers and their businesses through their evolving realities, whilst also taking every opportunity to optimize stakeholder value.
“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 61.4%, Pre-Tax Return on Assets (ROAA) of 8.8%, Full Impact Capital Adequacy Ratio (CAR) of 24.7% and Cost to Income ratio of 27.7%”.
GTCO is a leading financial services group with banking operations in Nigeria, West Africa, East Africa, United Kingdom alongside new businesses in Payment, Funds Management and Pension Fund Administration.
Its leadership in the banking industry and efforts at empowering people and communities have earned it many prestigious awards over the years.
Recently, Guaranty Trust Bank was recognized as Nigeria’s Best Bank and Best Bank in CSR at the 2023 Euromoney Awards for Excellence, Best Banking Group in Nigeria by World Finance, and Best Bank in Nigeria by Global Finance. GTCO’s Guaranty Trust Bank is featured in the Top 1000 Banks in the World and Top 100 Banks in Africa rankings by The Banker.