By OBINNA EZUGWU
Coming from N238.1 billion profit before tax declared in its 2020 full year report, leading Nigerian lender, Guaranty Trust Bank Plc, has set a positive tone for the current year with an impressive first quarter performance that signals its intention.
The bank reported profit before tax of N53.7 billion for the first quarter of 2021, ended March 31, representing 7.8% decline compared to the N58.2billion recorded in the corresponding period of 2020.
This, according to the bank’s unaudited results for the period released to the Nigerian and London Stock Exchanges, a modest outing amid economic headwinds occasioned by Covid.
Further review of the results showed that Deposit Liabilities increased by 3.0% from N3.611trillion in December 2020 to N3.717 trillion in March 2021, whilst the Group’s Loan book (Net) dipped by 1.4% from N1.663trillion recorded as at December 2020 to N1.639trillion in March 2021.
The Bank’s Balance sheet remained well structured and diversified with total assets and Shareholders’ Fund closing at N4.993trillion and N837.2billion respectively.
Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 26.1%, while Asset quality was sustained as NPL ratio and Cost of Risk (COR) closed at 6.1% (Bank: 5.6%) and 0.11% (Bank: 0.02%) in March 2021 from 6.0% (Bank: 5.9%) and 0.08% (Bank: 0.01%) in March 2020 respectively.
Commenting on the financial results, the Managing Director/CEO of Guaranty Trust Bank plc, Mr. Segun Agbaje, said; “We have started off the 2021 financial year on a fair footing, and our first-quarter results demonstrate our ability to continue delivering strong and sustainable returns, despite the macroeconomic uncertainties that persist in our business environment.
“This is a reflection of the resilience of our franchise, our prudent approach to risk management and the efficacy of our digital-first customer-centric business strategy.”
He further stated that; “Looking forward, we are optimistic about the long-term value that we will continue to create as an organization. We strongly believe that our new growth strategy, together with the enduring loyalty of our customers, the hard work and dedication of our staff and the unwavering support we continue to enjoy from our shareholders, will enable us drive and deliver best-in-class financial solutions for people, businesses and communities across Africa and beyond.”
Financial Highlights:
– Profit before tax of N53.7bn (31 March 2020 N58.2bn) a decrease of 7.8%.
– Profit after tax decreased by 9.0% to N45.5bn from N50.1bn as of 31 March 2020.
– Earnings per share of 160kobo compared to 177kobo per share as of 31 March 2020.
• Revenue
– Interest Income of N60.3bn (31 March 2020: N77.0bn) down 21.7% as lower yields offering in-spite of growth in average volumes led to 400bps decline in Earnings asset yield, this weigh negatively on Interest earned on Loans and Advances Loans and Fixed Income, dropping by 4.5% and 67.3% respectively.
– Non-Interest Income of N45.9bn comprising of Fee and commission income, Net trading gains, and Other income (31 March 2020: N35.8bn) up by 28.0% due to significant growth in transaction volumes and improvement in earnings from dealing room activities, this compensated but not adequate to offset the dip in funded Income. Net trading gain grew by 63.5% while other income and in fees and commissions increased by 21.8% and 21.5% respectively.
– Net interest margin of 7.0% (31 March 2020: 9.9%).
• Balance Sheet
– Total assets of N4.993trn (31 December 2020: N4.945trn) up 1.0%
– Net loans and advances of N1.639trn (31 December 2020: N1.663trn) down 1.4%.
– Deposit Liabilities of N3.717trn (31 December 2020: N3.611trn) up 3.0%.
Credit Quality
– Non-performing loans to total loans at 6.1%, 5.6% at Bank level (31 December 2020: 6.4%, 5.9% at Bank level).
– Coverage for Lifetime Credit Impaired Loans at 136.3% (31 December 2020: 128.7%)
– Cost of Risk at 0.11%, 0.02% at Bank level (31 December 2020: 1.18%, 0.97% at Bank level).
•Continued focus on efficiency
– Cost to income (CIR) of 42.6% (31 March 2020: 40.6%). Increase in CIR was influenced by increase in inflation rate.
• Subsidiaries
– Contribution to PBT from subsidiaries increased to 21.8% from 16.2% in March 2020.
