Guaranty Trust Holding Company reported remarkable performance indicators in its recently disclosed half-year 2021 results, with its non-performing loans ratio to total loans dropping to 5.99 percent from 6.39 percent in the same period in 2021.
The non-performing loans ratio, which is a critical statistic in determining a bank’s efficacy in receiving loan repayments, demonstrates that GTCO has increased its efforts to lower its delinquent loans to the absolute minimum.
Consequently, the Nigerian Exchange’s most capitalized listed financial entity was able to increase its liquidity ratio to 44.71 percent as of June 2021. This is significantly above the regulatory minimum of 30%, which is a considerable improvement given the group’s average liquidity ratio of 40.71 percent for the evaluation period.
Despite the pressures of the COVID-19 pandemic restrictions, reopening of the economy, fiscal and economic morass, and regulatory debits recorded in the time under review, the leading financial institution was able to grow liquidity in the firm.
Below are the highlights of the financials
GTCO generated a sum of N207.91 billion as gross earnings in the period under review.
Non-Interest Income was bolstered by increased transactional volumes and turnover as a result of the economy’s reopening following the Covid 19-induced lockdown. These initiatives resulted in a favorable inflow from the business’s e-business and account maintenance revenue units, which increased by N3.9 billion and N2.3 billion, respectively.
Profit before taxation fell 15.18 percent to N93.06 billion in the review period, down from N109.71 billion in the same period in 2020.
The group’s total asset climbed by 1.47 percent in the first six months to finish at N5.02 trillion in June 2021, up from N4.94 trillion in December 2020.
According to the bank’s investor presentation, in response to falling loan and FIS yields, the Group reduced its Cost of Funds to 0.7 percent in H1 2021 from 1.5 percent in the same period in 2020, while interest expense decreased by 46 percent to N10.9 billion in H1 2021 from N20.3 billion in H1 2020.
Deposits from other banks climbed considerably by 27.61 percent to close at N129.54 billion in June 2021, while deposits from customers increased by N115.89 billion between January and June 2021, bringing total customer deposits to N3.63 billion at the conclusion of Q2 2021.
The AMCON levy increased by 27.3 percent as a result of the rise in total asset and contingents to N4.37 trillion in FY 2020 from N3.44 trillion in FY 2019. It should be noted that the AMCON levy is calculated at 0.5 percent of the previous year’s total asset and contingents.
Despite the operational environment’s challenges in H1 2021, the Group was able to navigate efficiently, implementing suitable strategies to generate a Post Tax Return on Average Assets of 3.33 percent and a Post Tax Return on Average Equity of 19.56 percent. The Group generated a post-tax ROAE of 19.71%, a post-tax ROAA of 3.19%, and a NIM of 6.98%.
The Group maintained excellent capital balances, with Full and Transitional IFRS 9 impact Capital Adequacy Ratios (CAR) of 24 and 26.3 percent, respectively, significantly above the required requirement of 15 percent.
The bank’s investment securities climbed 17.8 percent year on year to N1.23 trillion in H1 2021, up from N1.04 trillion in the same period in 2020.
The Group ended the first half of the year with a profit before tax (PBT) of N93.1 billion. As the Group restructures to become a Financial Holding Company, the revenue base is expected to be strengthened further, resulting in improved performance across all key profitability measures.
Remember that Guaranty Trust Holding Company announced the bank’s restructuring in July 2021, with the goal of improving its long-term competitiveness and development prospects.
The Group also announced the appointment of Mr. Segun Agbaje as the new Group CEO of GTCO, as well as Mrs. Miriam Olusanya as the MD of GT Bank.
It is worth mentioning that, despite the drop in the Group’s earnings after tax, it declared an interim dividend of 30 kobo per share for the half-year period ended June 2021, the same as given to its shareholders in the same period in 2020.
What this means
GT Bank is one of the foremost major financial institutions in Nigeria, with a track record of the impressive performance of the years which it demonstrated in its recent financial statement despite the economic doldrums in the past year caused by the covid-19 lockdown.
The Bank continued in its move to give value to its investors having declared an interim dividend of 30 kobo per share in H1 2021 despite the drop in its bottom line.