Guaranty Trust Holding Company Plc (GTCO) has announced its audited financial results for the 2024 fiscal year, marking a historic milestone with a profit after tax (PAT) exceeding N1 trillion. This remarkable achievement underscores GTCO’s robust financial performance and strategic positioning within Nigeria’s banking sector.
Financial Highlights:
- Gross Earnings: The Group’s gross earnings surged to N2.12 trillion, a substantial increase from N1.13 trillion reported in the previous year.
- Profit Before Tax (PBT): GTCO reported a PBT of N1.266 trillion, a significant rise from N609.3 billion recorded in the prior year.
- Profit After Tax (PAT): The PAT reached N1.017 trillion, marking an 88.4% increase from N539.6 billion in the previous year.
Key Financial Ratios:
- Return on Equity (ROE): The Group achieved a pre-tax ROE of 103.6%, reflecting its efficiency in generating profits from shareholders’ equity.
- Return on Assets (ROA): The pre-tax ROA stood at 16.6%, indicating effective utilization of the Group’s assets to generate earnings.
- Cost-to-Income Ratio: GTCO maintained a cost-to-income ratio of 16.7%, demonstrating operational efficiency.
- Capital Adequacy Ratio (CAR): The CAR remained robust at 21.0%, well above regulatory requirements, ensuring financial stability.
Balance Sheet Overview:
- Total Assets: The Group’s total assets grew to N14.5 trillion, up from N9.7 trillion in the previous year, indicating significant expansion.
- Loan Book: Net loans increased by 25.5% to N3.11 trillion, compared to N2.48 trillion as of December 2023.
- Deposit Liabilities: Deposits grew by 39.8% to N10.55 trillion, up from N7.55 trillion in December 2023.
Operational Efficiency and Asset Quality:
- Net Interest Margin (NIM): The NIM improved to 10.45% in H1 2024 from 7.76% in H1 2023, driven by higher yields on interest-earning assets.
- Non-Performing Loan (NPL) Ratio: The NPL ratio edged up slightly to 4.26% from 4.2% in 2023, indicating a marginal increase in credit risk.
- Liquidity Ratio: The liquidity ratio improved to 44.9%, up from 31% in H1 2023, ensuring the Group’s ability to meet its short-term obligations.
Strategic Insights:
GTCO’s stellar performance is attributed to its strategic focus on high-yielding investment securities and diversification into fee-based income streams. The Group’s emphasis on operational efficiency and cost management has further bolstered its profitability. However, challenges such as rising NPLs and a slowdown in deposit growth necessitate vigilant risk management to sustain long-term growth.
Market Performance and Dividend Declaration:
GTCO’s share price has appreciated by 13.58% year-to-date, closing at N46, reflecting investor confidence. The Group declared an interim dividend of N1 per share, up from N0.50 in the previous year, with payment scheduled for October 7, 2024. This underscores GTCO’s commitment to delivering value to its shareholders.
