GTBank Plc – Interest Income Bolsters Earnings Despite Low Yield Environment

Must Read

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

List of First Bank of Nigeria Sort Codes in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...
- Advertisement -

The Bank recently released its Q1 2020 unaudited financial report indicating a modest performance in earnings due to the drop in non-interest income. However, the modest growth in interest income supported the bank’s performance. Gross earnings in the period under review rose marginally by 1.98% to N111.95 billion in Q1 2020 from N109.78 billion in the corresponding period of 2019.

Interest income was the major driver for growth amidst the low yield environment, having advanced by 3.43% y/y from N74.48 billion in Q1 2019 to N77.03 billion in Q1 2020. The growth was driven by the interest received on investment securities by 8.29% to N27.27 billion and interest on loans and advances granted to customers by 6.10% from N43.74 billion to N46.41 billion in Q1 2020.

Interest expense declined by 21.59% from N16.26 billion in Q1 2019 to N12.75 billion in Q1 2020. This was largely supported by a 20.78% drop in interest expense on deposits from customers despite the 9.30% enhancement in deposits from customers as the bank’s drives towards its low-cost funding strategy. Furthermore, interest expense on borrowed funds declined by 1.71%, due to the 2.95% drop in borrowed funds to N158.17 billion in Q1 2020, from N162.99 billion in FY 2019 as the bank doesn’t have any major debt instrument in place. Consequently, the drop in interest expense further supported the growth in net interest income from N58.21 billion in Q1 2019 to N64.28 billion in the period under review, indicating an increase of 10.42%.

Non-Interest Income dropped by 1.07% y/y to N34.94 billion from N35.29 billion in Q1 2019. The downward trend in non-interest income was as a result of 24.74% decline in fees and commission from N18.01 billion in Q1 2019 to N14.46 billion in the corresponding period of 2020, due to the drop in fees from E-business(21.52%), corporate finance fees (59.44%), credit-related fees (38.81) and foreign exchange deals (12.38%). However, other operating income and trading gains grew by 22.35% and 27.43% to N15.94 billion and N5.41 billion respectively, which were buoyed by foreign exchange recoveries and revaluation gains. Operating expenses increased by 10.85% to N39.77 billion, while operating income rose by 5.51% to N97.97 billion, thus settling the cost to income ratio at 40.59% from 38.64% in Q1 2019. The bank’s Profit before Tax (PBT) increased by 2.14% from N56.98 billion in Q1 2019 to N58.20 billion in Q1 2020. Mean-while the Profit after Tax (PAT) increased by 1.55% to N50.06 billion from N49.30 billion in Q1 2019.

Read Also:  Over 100 Small Businesses to Participate in 2017 GTBank Food and Drink Fair
- Advertisement -

Gross loans and advances expanded by 8.08% to N1.62 trillion from N1.50 trillion in FY 2019. The total deposit also expanded by 8.33% from N2.64 trillion in FY 2019 to N2.86 trillion at the end of Q1 2020. We maintain a positive outlook for the bank despite the current economic trend, as the bank’s management continues to drive its low-cost funding strategy, coupled with its investment in the fixed income market and relaxation from foreign exchange losses. We maintain our BUY rating recommendation at the current market price as the stock traded at a discount to our blended target of N32.75.

GTL Research

- Advertisement -
GTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand SpurGTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

GTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand SpurGTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand Spur

Latest News

Asia Pacific Rayon Raises US$300m from National and International Affiliated Banks to Expand Production Capacity

  • Continued capital expenditure aims to boost production and support the recovery of Indonesian economy
  • Loan agreements aligned with Indonesian Government's strategy to drive investment growth in 2021
  • APR is a member of the RGE group of companies


JAKARTA, INDONESIA - Media OutReach - 12 April 2021 - Asia Pacific Rayon (APR), the largest integrated rayon fiber producer in Indonesia, today announced that it has secured a syndicated loan facility of Rp 4.5 trillion (US$300 million) with national and international affiliated banks. The funding will be used to support continued capital investment in the company's production facilities at Pangkalan Kerinci, Riau Province, Sumatra.

Read Also:  GTBank’s MD/CEO, Segun Agbaje to speak at Social Media Week on Thursday, February 27, 2020

APR is vertically integrated through its supply chain, from renewable fiber plantations to high-value textile development. It commenced operations in 2019 and was formally inaugurated by President Jokowi Widodo in February 2020. APR plans to increase its production capacity over the coming year to capture the strong growth potential of viscose staple fiber (VSF), strengthening its market position in Indonesia and in export markets across the region. APR is a member of the RGE group of companies. Founded by Sukanto Tanoto, RGE manages a group of resource-based manufacturing companies with global operations.

The syndicated loan participating banks are PT Bank Rakyat Indonesia (Persero) Tbk, PT Bank Central Asia Tbk, PT Bank Pan Indonesia Tbk, PT Bank Pembangunan Daerah Jawa Barat, PT Bank Woori Saudara Indonesia 1906 Tbk and PT Bank KEB Hana Indonesia

The joint mandated lead arrangers and bookrunners for the syndicated loan are PT Bank Rakyat Indonesia (Persero) Tbk, PT Bank Central Asia Tbk, and PT BANK Pan Indonesia Tbk.

Basrie Kamba, Director, Asia Pacific Rayon, said: "This funding will be used to support continued investment in our operations in Kerinci. Rayon fiber, or viscose, is a textile raw material derived from sustainably managed plantations. As rayon is both renewable and biodegradable, it supports the trend towards sustainable fashion in Indonesia and in other markets around the world."

APR's planned expansion is aligned with the Indonesian Government's strategy to increase investment and boost employment to support the recovery of the country's economy and address the continued impact of the COVID-19 pandemic. Following the passing into law of the Omnibus Bill in October last year to streamline investment and stimulate job creation, President Widodo said last month that investment would be the key factor in achieving 5% economic growth in 2021.

"This loan facility and our continued investment in our operations are evidence of the growth potential of the viscose rayon sector in Indonesia and around the world. We are committed to supporting the Indonesian Government's efforts to improve the investment climate in export-oriented manufacturing industries, and its efforts to create upstream jobs in plantations and the processing of raw materials, and downstream opportunities in textile factories and related businesses," said Basrie.

Hari Setiawan, Executive Vice President of PT Bank Rakyat Indonesia (Persero) Tbk said : "As Representative of JMLAB and all lenders, I hope this collaboration will be useful to support the growth and development of PT Asia Pacific Rayon in increasing production and operations and also supporting the recovery of Indonesia's export growth."

"Support from BCA and other Banks reflect our confidence in APR, and as our contribution to promote a sustainable and environment friendly industry. We hope this cooperation will tighten our relationship as well," said Susiana Santoso, Executive Vice President of PT Bank Central Asia Tbk.


About Asia Pacific Rayon

Asia Pacific Rayon is the first fully integrated viscose rayon producer in Asia. Located in Pangkalan Kerinci, Riau, the company uses the latest production technology to produce high-quality rayon to meet textile needs. APR is committed to becoming a leading viscose rayon producer with the principles of sustainability, transparency and operational efficiency, serves the interests of the community and the country, and provides value to customers. APR is part of the RGE (Royal Golden Eagle) group of resource-based manufacturing companies. Sustainability is fundamental to APR. The APR Sustainability Policy, updated in September 2020, include additional commitments on pulp sourcing and clean manufacturing.


About RGE

RGE Pte Ltd manages a group of resource-based manufacturing companies with global operations. Our work ranges from the upstream, comprising sustainable resource development and harvesting, to downstream, where our companies create diverse value-added products for the global market. Our commitment to sustainable development underpins our operations, as we strive towards what is good for the community, good for the country, good for climate, good for customer, and good for company. RGE was founded in 1973. The assets held by RGE companies today exceed US$20 billion. With more than 60,000 employees, we have operations in Indonesia, China, Brazil, Spain and Canada and continue to expand to engage newer markets and communities. www.rgei.com

GTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand Spur
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -GTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand SpurGTBank Plc - Interest Income Bolsters Earnings Despite Low Yield Environment - Brand Spur