GTBank Keeps Expenses Lean At Half-year, Nets N99.133bn Profit, Offers N0.30 Dividend

Guaranty Trust Bank Plc, on Friday became the first of the dividend-paying stock to present its audited score-card for the half-year ended June 30, 2019, highlights of which included a marginal drop in interest, rise in fee, commission and other incomes, just as the management successfully kept expenses in check, while growth in loan impairment was constrained.

Profit after tax for the period stood at N99.133bn, up from N95.581bn in the corresponding period of 2018, despite the N2.5bn rise in income tax expense, which left Earnings Per Share at N3.50, as against the previous N3.38 each. Of this amount, the board has recommended a dividend per share of 30 kobo, just like prior year payable to holders of the bank’s ordinary shares whose names appear in the register as at close of business on Monday, September 2, 2019. The dividend will, however, be payable to holders of the bank’s Global Depository Receipts (GDR) listed on the London Stock Exchange as of August 26, 2019. This means that qualification date for the dividend payout is September 2, 2019, while the closure of register will happen on Tuesday, September 3, 2019, while that of GDR holders is August 27, 2019. The payment date for the dividend is set for September 11, 2019.

Meanwhile, gross earnings for the period stood at N220.675bn, of which N144.751bn or 65.59% was derived from the corporate banking segment, followed by N40.874bn from retail banking, N20.827bn, commercial banking, while N9.747bn and N4.473bn came from SME and public sector banking respectively.
A further breakdown of the revenue by geography showed that N177.714bn was derived from within Nigeria, down from N190.279bn in the corresponding period of 2018; followed by N31.786bn from the rest of West Africa, an increase from N24.994bn; N8.095bn came from the East Africa region, up from N7.67bn; and N4.273bn from Europe, compared to N3.687bn in the prior half-year.

Interest income for the period dropped from N159.871bn in 2018 to N146.448bn; interest income on financial assets at fair value through profit and loss inched from N2.009bn to N2.543bn; while interest expense dropped by about N11bn to N32.627bn, as against the previous N43.951bn. This left net interest income at N116.364bn, up from N117.929bn in the prior half-year; just as loans impairment charge of N2.186bn, compared to N2.031bn previously, resulted in net interest income after loan impairment charges of N114.178bn, a drop from N115.897bn.

Fee and commission income notched N7.992bn or 29.22% from N27.356bn to N35.348bn; expense crawled to N1.505bn from N1.446bn; bringing net fee and commission income for the period to N33.843bn, up from N25.909bn.
Net gains on financial instruments held at fair value during the review period fell to N9.488bn from N12.649bn, representing a drop of N3.161bn or 25%. Other income rose from N24.745bn to N28.039bn; even as net impairment on other financial assets stood at N108.445m from nil in the previous half-year. Personnel expenses stayed flat at N18.578bn, compared to N18.576bn in 2018; depreciation and amortization inched to N10.622bn from N8.23bn. Other operating expenses dropped slightly from N41.961bn to N39.439bn, resulting in profit before tax of N115.787bn, compared to the N109.632bn reported in the corresponding period of 2018; while income tax expense stood at N16.654bn from N14.051bn. A breakdown of the PBT showed that corporate bank took the lead, contributing N80.448bn, ahead of the N22.684bn from retail banking, while commercial banking pooled N8.009bn; SME banking, N1.974bn and public sector, N1.477bn. Corporate banking also boosted the group’s after-tax profit, contributing N68.756bn, after accounting for N11.691bn in tax expense; ahead of N19.387bn and N3.296bn tax expense by the retail banking group; commercial banking, recorded N6.845bn net profit; SME banking, N1.687bn and retail banking, N1.262bn.

By region, Nigeria remained most profitable, accounting for N96.96bn or PAT, as against N96.385bn; followed by the N16.92bn from the rest of West Africa, up from N11.834bn; N1.243bn from East Africa, a significant improvement from just N553.53m in 2018; and just N661.97m from Europe, a drop from the preceding half-year’s N858.618m.
Growth on the balance sheet was also marginal, with total assets at N3.598tr, up from N3.287tr at the end of December 2018. The bulk of this was the customer loans and advances at N1.272tr from N1.259tr; while total liabilities improved from N2.711tr to N2.995tr; boosted by the N2.417tr customer deposits; while shareholders’ funds climbed to N603.01bn from N575.567bn.

Meanwhile, the external auditors called attention to impairment of the group’s loans and advances to the tune of N9.09bn for individual and N63.82bn to corporate customers, which they consider significant in size compared to N1.27tr portion of the balance sheet that is unimpaired.

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