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GTB’s corporate action lifts half-year interim dividend to N71bn

GTBank-profit-chart

Guaranty Trust Bank Plc (GTB), Nigeria’s tier one lender, sustained its tradition last weekend with the announcement of 30 kobo interim dividend per share following the release of its half year audited financial statement for the period ended June 30, 2019. Considering its shares outstanding, GTB’s corporate action amounted to N8.83 billion interim dividend to shareholders. Thus, this has increased the total interim dividend declared year to date to N70.97 billion, according to the Dividend Monitor of BusinessDay Research and Intelligence Unit (BRIU). Other companies that have so far announced interim dividends include Rak Unity, MTN Nigeria, Custodian Investment as well as Forte Oil Plc.

Rak Unity Petroleum proposed 10 kobo interim dividend which translated to N5.7 million at half year. The closure and payment dates are August 15 and 23, 2019 respectively.

Earlier, MTN Nigeria announced N2.95 interim dividend per share which amounted to N60.05 billion and shareholders were paid on August 16, 2019. Custodian Investment proposed 10 kobo interim dividend per share which amounted to N0.59 billion with closure and payment dates on August 22 and September 5,2019 respectively. Forte Oil had earlier announced N1.15 interim dividend per share which amounted to N1.497 billion and shareholders were paid on June 10, 2019.

Meanwhile, GTB’s H1 2019 results were mixed as some metrics remained flat, but fee and commission income ensured profit after tax grew by some margin.

During its first six months of the year, net interest income remained flat at N116.36 billion compared with N117.93 billion in corresponding period in 2018. Net interest income after loan impairment charges stood at N114.18 billion in contrast to N115.9 billion in similar period in 2018. Interestingly, net fee and commission income rose by 31 percent from N25.9 billion in June 2018 to N33.8 billion in June 2019. Other income rose by 13 percent to N28.04 billion at half year 2019 as against N24.7 billion in June 2018.

Personnel expenses remained unchanged while other operating expenses fell marginally. And consequently, profit before tax grew by 6 percent to N115.8 billion as against N109.6 billion in corresponding period in 2018. Profit after tax for the period rose by 4 percent during the reference period from N95.58 billion to N99.13 billion.

But 90 percent of its profit came from both the corporate and retail banking space. In June 2018, GTB realised N67.26 billion as profit after tax from the corporate banking segment , compared with N68.8 billion in June 2019 from the same banking space, meaning that profitability from the corporate banking wing of GTB rose by just 2.22 percent despite contributing 71 percent of the group’s profit in June 2018 and 70 percent of the total profit in June 2019.

Retail banking segment witnessed a turnaround as profitability increased by 12.47 percent during the reference period. From N17.23 billion retail banking PAT in June 2018, this segment’s PAT rose to N19.4 billion as at June 2019. In effect, retail banking contributed 18 percent to the total profit realised in June 2018 and 20 percent to the total profit made in June 2019. In both years, the corporate and retail banking segments, when combined contributed 90 percent of the group’s total PAT.

Commercial banking profit fell by 6.7 percent from N7.34 billion in June 2018 to N6.85 billion in June 2019. This implies that this segment of GTB’s operations contributed 8 percent to the total profit in June 2018 and 7 percent in June 2019. SME banking generated N1.26 billion at half year 2019 as against N1.67 billion same period in 2018, implying a 1.1 percent growth in its profitability. The worst performance was from public sector banking segment that witnessed 11.8 percent decline in its profitability. From N1.43 billion PAT in June 2018, the segment profitability fell to N1.26 billion. Worse still, its contribution also fell from 2 percent in June 2018 to 1 percent in June 2019.

Investors last Friday traded 67.86 million shares of GTB worth N1.76 billion. GTB’s share price rallied by 0.97 percent following the announcement. It closed at N26 per share but year to date; its share price is down by 24.5 percent.

 

TELIAT SULE