By Dipo Olowookere
One of the biggest financial institutions in Nigeria, Guaranty Trust Bank (GTBank) Plc, on Wednesday excited the investing community with an impressive first quarter performance.
In its financial statements for the period ended March 31, 2020, the tier-one lender improved its profit before tax (PBT) by 2.1 percent to N58.2 billion from N57.0 billion achieved as at March 31, 2019.
Also, the profit after tax marginally increased by 1.6 percent to N50.1 billion from N49.3 billion, while the earnings per share (EPS) grew by 1.7 percent to N1.77 from N1.74.
An analysis of the Q1 2020 earnings of GTBank by Business Post showed that the interest income increased to N77.0 billion from N74.5 billion as a result of interests collected on loans disbursed to customers during the period, which accounted for N46.4 billion as against N43.7 billion in the same time of 2019.
According to GTBank, it had a lower interest expense of N12.8 billion compared with N16.3 billion in the first quarter of last year.
In addition, it generated N14.5 billion from fee and commission income, lower than N18.6 billion it raked in the same period of last year despite increase in transfers related charges and account maintenance charges.
The reason for the decline in the fee and commission income was because of drop in credit related fees and commissions, corporate finance fees, e-business income, commission on foreign exchange deals and account services, maintenance and ancillary banking charges.
With a fee and commission expense of N909.3 million as against N547.8 million in Q1 2019, GTBank closed the first quarter of this year with a net fee and commission income of N13.6 billion, lower than N18.0 billion in the corresponding period of 2019.
However, it recorded a growth in other income, which flew to N16.0 billion from N13.0 billion as a result of increase in foreign exchange revaluation gain (N8.5 billion in Q1’20 versus N2.6 billion in Q1’19) and a significant rise in discounts and recoverables (fx), which jumped to N4.7 billion from N1.1 billion.
During the period under consideration, GTBank increased its personnel expenses to N9.2 billion from N9.1 billion, while other operating expenses rose to N23.0 billion from N21.3 billion.
An analysis of its balance sheet showed that it had a year-to-date growth of 7.9 percent in its total assets, which closed at N4.1 trillion in Q1 2020 versus N3.8 trillion in FY 2019.
In the same period under review, its total liabilities also increased year-to-date by 9.7 percent to N3.4 trillion from N3.1 trillion.
The financial institution said its loans and advances to customers increased to N1.6 trillion as at March 31, 2020 from N1.5 trillion as at December 31, 2019.
A breakdown of the loans indicated that N1.590 trillion are performing compared with N1.465 trillion in FY’19, while N100.6 billion are non-performing as at Q1 2020 as against N102.4 billion in December 2019.
This left the lender with gross loans of N1.7 trillion in the period under review in contrast to N1.6 trillion in the 2019 fiscal year.
GTBank said within the first three months of this year, deposits from customers increased to N2.8 trillion from N2.5 trillion in FY 2019. This was due to increases in deposits from current and savings account holders.
Adedapo Adesanya