Guaranty Trust Bank Plc Q1’20 unaudited results – Earnings float on lower cost of funds


CardinalStone Research – Guaranty Trust Bank Plc reported a 1.7% YoY growth in EPS to N1.77 in its unaudited Q1’20 result, largely supported by a 10.4% growth in net interest income. 


  • 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
  • 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).
  • 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
  • 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.

Guaranty Trust Bank Plc Q1'20 unaudited results - Earnings float on lower cost of funds - Brand Spur

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