• Monday, May 27, 2024
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Why GTCO’s quarterly earnings surged almost eight-fold in one year

Why GTCO’s quarterly earnings surged almost eight-fold in one year

The earnings of Guaranty Trust Holding Company Plc (GTCO), a multinational financial services group, jumped by 685.6 percent within a year, according to its latest financial statement.

GTCO’s after-tax profit rose to N457.1 billion in the first three months of this year from N58.2 billion in the same period of 2023.

Further analysis shows that the group’s profit was the highest among its tier one peers such as Access Holdings Plc (N159.3 billion), United Bank for Africa Plc (N142.6 billion) and Zenith Bank Plc (N258.3 billion)

“Our first quarter results reflect the unfolding value of what we have created across all our business verticals through the holding company structure from banking and payments to funds management and pension,” Segun Agbaje, group chief executive officer of GTCO said in a statement.

“We are strategically positioned to effectively compete and meet all our customers’ needs within a unified, thriving financial ecosystem,” he said.

He said despite the challenging operating environment, “the company’s solid performance, highlighting significant growth across all financial and non-financial metrics.”

Read also: Access Holdings’ three-month profit more than doubles to N159bn

Agbaje affirmed that the company remains on track to meet its full-year guidance.

GTCO’s net interest income grew by 172 percent to N213.8 billion while non-interest income surged 666 percent to N394.9 billion.

It recorded a 696.1 percent rise in earnings per share to N16.24 for Q1, as against N2.04 in Q1 of 2023.

“The impressive growth in the Holdco’s earnings was driven primarily by the fair value gain on the group’s financial instruments (N331.55 billion in Q1 from loss of N99.00 million in Q1 2023) coupled with expansion in its funded income line (170.6 percent),” Cordros Securities analysts said in a note on Friday.

“Interest income advanced by 170.6 percent to N281.65 billion, boosted by higher income from loans and advances to customers (91.0 percent), investment securities (307.5 percent) and cash and balances with banks (265.9 percent). We note that the Holdco’s earning assets increased by 104.3 percent year-to-date to N 10.18 trillion as the high yielding environment also supported growth in core income,” they added.

Cordros said GTCO witnessed a remarkable 666.4 percent increase in its non-interest income to N394.86 billion, majorly driven by the N331.55 billion fair value gain recorded for the Holdco’s financial instruments (Q1-23: loss of N99.00 million) as income from net fees and commission (74.5 percent) and FX trading (+48.9 percent year-on-year) also increased.

“Elsewhere, we highlight that the group recorded a higher FX revaluation loss of N12.67 billion (145.1 percent) in Q1.”

The holding company’s total assets surged to N13 trillion from N6.74 trillion while total liabilities grew to N10.99 trillion from N5.76 trillion

GTCO’s total equity grew to N2.01 trillion from N975.6 billion during the period.