How GTBank achieved a N trillion profit in nine months amid system upgrades

• Guaranty Trust Holding Company has reported a profit after tax of N1.08 trillion in the first nine months of 2024
• Data from the Nigerian Exchange Group (NGX) shows that the bank’s interest grew by 161% to N980 billion
• The report also added that net loans and customer advances rose 21.8% in the first nine months of 2024

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Guaranty Trust Holding Company has reported a profit after tax of N1.08 trillion in the first nine months of 2024, mostly from interest income.

Data from the Nigerian Exchange Group (NGX) shows that the bank’s interest grew by 161% to N980 billion, relative to N374.5 billion recorded in the same period in 2023.

Guaranty Holding Company reports massive profits after completing systems upgrade Credit: GTBank
Source: Getty Images

Interest income experiences a surge

The rise in interest income is due to increased average earning assets and average yields.

The report also added that net loans and customer advances rose 21.8% in the first nine months of 2024 due to the devaluation of foreign currency loans.

The tier-1 bank’s expenses also rose, showing broader economic pressures.

Interest expenses spiked by 158.2% to N198.9 billion, while customer deposits saw a moderate increase of 44.1%.

The bank also reported a net interest income of N781.5 billion, a 162.6% rise from N297.5 billion in the same period in 2023.

GTBank’s fees and commission revenue grows

The Nigerian bank experienced fees and commission revenue growth, which increased by 97.3% to N180.2 billion from N91.3 billion in 2023.

The growth was driven by a 53.7% increase in e-business income, representing a quarter of the total fees and commissions.

Account maintenance charges and ancillary banking services also contributed, rising by 62.7 and 217%, respectively.

However, GTCo reported an impairment loss on financial instruments totalling N63.9 billion from an impairment write-back of N148.6 billion.

Also, the bank experienced a loss in FX revaluation, with an unrealised FX loss of N1.7 billion from the N92.2 billion gain made during the period in 2023;

The bank’s operating expenses increased significantly by 61.1% to N297.4 billion due to increased energy costs and inflationary pressures on the Nigerian economy.

However, GTCo experienced a 65.0% increase in other income, primarily driven by N523.2 billion in unrealised fair value gains on financial instruments.

The bank’s cash generation shows operational solid efficiency, with net cash flow from operating activities hitting N1.87 trillion, an increase from the N88 billion recorded in 2023.

Meanwhile, the bank recorded a negative cash flow from investing activities of about N1.14 trillion due to investments in securities and property acquisitions.

Financing activities saw the bank earn a net inflow of N122.1 billion, primarily due to proceeds from borrowings.

GTBank pays 79.4 billion as dividends

In the year under review, the bank paid N79.4 billion in dividends and repaid borrowings and lease liabilities of N45.1 billion and N6,5 billion, respectively.

GTCo also received proceeds from borrowings amounting to N254 billion, bringing its net cash flow from financing activities to N122.1 billion in the first nine months of 2024.

As a result, cash and cash equivalents surged by 102.8% to N4.28 trillion from N2.11 trillion.

The bank’s loans and advances rose 46.1% to N3.2 trillion from N2.19 trillion, bringing its total assets to N15.6 trillion.

Deposits and current accounts rose 49.7% to N6.65 trillion from N4.44 trillion, while total shareholders’ funds rose to N2.63 trillion against N1.63 trillion.

The development comes as the bank, named one of Nigeria’s most profitable banks, upgraded its system to secure customers’ funds.

The bank disclosed that the upgrade was to secure depositors' funds in a more robust platform.

GTBank increases staff salary by 40%

Legit.ng earlier reported that Guaranty Trust Bank, one of Nigeria’s top deposit money banks, quietly increased staff salaries by 40% in September 2024 amid the ongoing cost-of-living crisis.

Four bank employees reportedly disclosed no prior communication before the raise. However, there were expectations among the bank's staff.

TechCabal said that one of the employees, an assistant banking officer who now earns N720,000, disclosed that the position is just one level above the entry level in the bank’s employee structure.

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Source: Legit.ng