Guaranty Trust Bank Plc (GTBank) Wednesday released its unaudited financial results for the nine months ended September 30, 2019, showing gross earnings of N324.262 billion. This was down three per cent from N334.711 billion in the corresponding period of 2018.
Net interest income rose to N172.937 billion from N170.641 billion in 2018, while net fee and commission income rose to N46.497 billion, compared with N37.84 billion in 2018. Loans impairment charges increased from N1.736 billion to N2.761 billion. Profit before tax (PBT) stood at N170.651 billion, up 3.9 per cent from N164.245 billion, while profit after tax (PAT) grew by 3.4 per cent to N146.989 billion as against N142.224 billion in 2018.
Looking the results, analysts at Cordros Capital said the bank’s performance had not been adversely affected as of yet.
“The result was in line with expectations as gross earnings declined while profitability expanded moderately. The performance was underpinned by non-funded income growth, as interest income growth continues to lag the prior year,” they said.
According to Cordros Capital, GTBank’s interest income declined by 5.6 per cent to N224.19 billion as income from loans to customers declined by 6.3 per cent to N134.47 billion. Notably all interest income generating lines were weaker year-on-year, save for income from cash and its equivalents, which was up by 18.6 per cent to N10.11 billion.
“Interest expense also declined by 23.4 per cent to N32.63 billion, as the bank shed high cost deposits during the year, interest on deposits from customers declined by 20.4 per cent, to N42.90 billion, while zero cost on debt securities relative to the prior year (N4.34 billion) also contributed. Consequent on the higher pace of decline in expense relative to income, the bank’s net interest income settled higher by 1.3 per cent. Similar to many banks, the GTBank’s non-interest income growth has outpaced interest income growth, as non-funded income grew by 3.0 per cent at N100.07 billion. This was supported by fees and commissions income which grew by 22.9 per cent to N46.50 billion. Notably transaction volumes have continued to grow, supporting E-business income (+63.1 per cent to N11.04 billion), while credit related business charges (+37.1 per cent to N9.08 billion) have also boosted the bank,” they added.
The analysts stressed that the performance was in line with their expectations, although the significant improvement in non-performing loans level, which can only in part, be explained by the expansion of the loan book, and was a welcome surprise.