GTCO Slightly Boosts Pre-Tax Profit by 1.12% in Q1 2022
By Dipo Olowookere
Guaranty Trust Holding Company (GTCO) Plc improved its pre-tax profit by 1.12 per cent year-on-year in the first quarter of 2022 to N54.3 billion from N53.7 billion.
However, because of the higher tax expense in the period under review (N11.1 billion versus N8.1 billion in Q1 of 2021 mostly due to a deferred tax payment), the post-tax profit fell to N43.2 billion from N45.6 billion.
Consequently, the earnings per share (EPS) in the first three months of this year depreciated to N1.51 from the N1.60 achieved in the first three months of last year when the market was recovering from the COVID-19 pandemic.
But the financial institution increased its interest income by 15.60 per cent to N63.9 billion from N55.1 billion, though its interest expense rose to N6.7 billion from N5.2 billion, leaving the net interest income at N57.2 billion as against the N52.4 billion reported in the corresponding period of 2021.
With loan impairment charges of N1.2 billion versus N1.9 billion in Q1’21, the lender closed on March 31, 2022, with net interest income after loan impairment charges of N56.0 billion in contrast to N50.6 billion as of March 31, 2021.
In the period under review, GTCO said it generated N21.3 billion from fee and commission income against the N17.6 billion achieved in the same time of last year, driven by an increase in account maintenance charges, corporate finance fees, e-business income, commission on foreign exchange deals and others.
However, lower bank charges moderated the fee and commission expense in the first quarter of this year to N2.6 billion from N3.0 billion despite an increase in loan recovery expenses.
In the financial statements released by the company and analysed by Business Post, it was observed that the other income was relatively flat as it stood at N12.3 billion compared with N12.2 billion a year ago as the personnel costs slightly dropped to N9.8 billion from N10.0 billion due to a reduction in wages and salaries and contributions to defined contribution plans.
However, other operating expenses significantly moved up by 33.18 per cent to N29.3 billion from N22.0 billion as a result of a rise in AMCON charges, occupancy costs, human capital-related expenses, administrative, communications and sponsorship-related costs; advert, promotion and corporate gifts, among others.
Within three months, GTCO improved its deposits from customers to N4.1 trillion from N4.0 trillion as of December 31, 2021, while the loans and advances to customers reduced year-to-date to N1.7 trillion from N1.8 trillion, with non-performing loans at N106.9 billion versus N113.9 billion.