Guaranty Trust Holding Company (GTCO) Plc has become the first Nigerian bank to report over N1 trillion in pre-tax profits for the first half of 2024. The bank’s impressive financial performance has set a new benchmark for the industry.
GTCO’s audited financial statements for the second quarter of 2024 show a staggering pre-tax profit of N494.5 billion, nearly doubling the profits reported in the same period a year earlier. This, combined with the N509.3 billion reported in the first quarter, brings the bank’s total pre-tax profits for the first half of the year to a remarkable N1 trillion.
This outstanding performance can be attributed to several key factors:
**Growth in Net Interest Income**
A significant driver of GTCO’s success was the 177% increase in net interest income, which reached N264.2 billion in the second quarter. This is the highest net interest income the bank has ever reported in a single quarter, surpassing the total net interest income of N259.3 billion recorded for the entire 2022 financial year.
**Loan Growth and Asset Quality**
The bank’s loan portfolio grew by 34% to N3.1 trillion, while total deposits increased by 62% to N10.2 trillion. Importantly, loan impairments declined by 79% to N33.9 billion, indicating improved asset quality and effective risk management.
**Diversified Income Streams**
GTCO’s performance was further bolstered by strong growth in commission and fee income, which rose by 126% to N48.8 billion. This was driven by increased e-business income, commissions on foreign exchange deals, and account maintenance charges.
**Forex Revaluation Gains**
The bank’s financial statements also revealed significant unrealized gains related to forex revaluation, including N493 billion in “Unrealized fair value gain on the financial instrument” and N130.2 billion in “Unrealized Gain on Forward Transactions.” These revaluation gains contributed significantly to the overall pre-tax profit figure.
**Geographical Diversification**
GTCO’s operations outside of Nigeria also played a role, contributing N255.9 billion to the bank’s pre-tax profits, while the Nigerian operations accounted for N843.1 billion.
The bank’s impressive performance has earned it the distinction of being the first Nigerian financial institution to surpass the N1 trillion pre-tax profit milestone in a single half-year period. This achievement is a testament to GTCO’s strategic focus, effective risk management, and ability to capitalize on emerging opportunities in the Nigerian banking landscape.
As a result of this exceptional performance, GTCO has declared an interim dividend per share of N1, which is double the 50 kobo per share paid in the same period last year.
The bank’s share price closed at N45.45 per share, down 0.11% on the day of the announcement, reflecting the market’s recognition of the bank’s strong financial standing.
GTCO’s landmark achievement sets a new benchmark for the industry and highlights the potential for Nigerian banks to excel on the global stage. This performance is likely to inspire other financial institutions to strive for similar levels of success, driving further innovation and growth in the Nigerian banking sector.
