Guaranty Trust Bank plc has released its unaudited financial results for the year ended March 31, 2020, to the Nigerian Stock Exchange (NSE).
A review of the results shows positive performance across most of the financial indices, reaffirming the Bank’s position as one of the most profitable and well managed financial institutions in Nigeria.
Profit before tax stood at ₦58billion, representing a growth of 2.1% over N57.0 billion achieved as of March 31, 2019.
Interest Income grew by 3.4% to N77bn from N74bn in the previous quarter.
Profit before tax grew by 2.1% to N58bn.
Profit after tax grew by 1.5% to N50.3bn.
Net Assets declined by -3.8% to N661bn from N687bn.
The Bank’s profit after tax increased by 1.5% to N50.1 billion from N49.3 billion, while the earnings per share (EPS) grew by 1.7 per cent to N1.77 from N1.74.
GTBank’s Net interest income improved by 10.4% YoY, mainly supported by a 70 bps decline in funding costs to 1.8%. The moderation in funding cost was achieved in spite of a 9.3% increase in customer deposits and a 30bps decrease in CASA ratio.
A further look into the Q1 2020 earnings of GTBank by Brand Spur revealed that the non-interest revenue (NIR) was relatively flat (-1.1% YoY) in the quarter. Although the bank recorded a 2.3x increase in FX-related income to N12.9 billion, lower net fee income (-24.7% YoY) and recoveries (-69.1% YoY) weighed on the overall NIR. The weakness in fee income reflected notable slowdowns in credit (-38.8% YoY) and e-Business fees (-21.5% YoY).
During the period under consideration, operating expenses climbed 10.9% YoY, leading to an increase in cost-to-income ratio to 40.1% from 38.4% in Q1’19. The rise in operating costs reflected higher depreciation & amortization (+49.2% YoY) and AMCON (+11.2% YoY) charges
The financial institution stated that its gross loans to customers rose by 7.8% to N1.7 trillion. NPL ratio fell to 6.0% from 6.5% in December 2019. Cost of risk was relatively flat at 0.3%.
All in, ROE came in lower at 29.7% (FY’19: 31.2%). On regulatory compliance, both capital adequacy and liquidity ratios remain above regulatory thresholds at 26.7% and 45.6% respectively.
Also, the bank’s deposits from customers increased to N2.8 trillion from N2.5 trillion in FY 2019. This was due to increases in deposits from current and savings account holders.