*Proposed N7.03/share final dividend
WorldStage Newsonline– Guaranty Trust Holding Company Plc (GTCO) on Friday published its 2024 full year audited financials with profit before tax advancing by 107.8% y/y to N1.27 trillion, while profit after tax grew by 88.6% y/y from N539.65 billion in 2023 to N1.02 trillion.
This translated to an earnings per share of N35.44 from N19.07 in 2023.
The group’s performance was driven by the sturdy growth in both interest (+143.6% y/y) and non-interest (+42.1% y/y) income lines.
Notably, the board proposed a final dividend of N7.03/share (2023FY: N2.70/share), translating to a dividend yield of 10.9% based on the last closing price of N64.25/share on 27 March), bringing the total dividend for 2024 to N8.03/share from N3.20/share in 2023.
Specifically, GTCO reported a 143.6% y/y growth in interest income to N1.34 trillion, driven by higher income from key contributory lines.
In nominal terms, the group generated higher revenue from investment securities (+228.8% y/y to N599.32 billion) and loans & advances to customers (+75.2% y/y to N509.25 billion), placements with other banks (+242.5% y/y to N226.83 billion), which was sufficient to offset the decline in income from loans and advances to banks (-44.7% y/y).
The increase in funded income was driven by the combined impact of elevated rates in the fixed income market and increases in the HoldCo’s earning assets (+59.9% y/y to N11.61 trillion).
Consequently, earnings yield increased significantly by 397bps to 11.6%.
However, non-performing loan ratio increased to 4.9% (2023FY: 4.2%), primarily due to the exchange rate impact on the group’s FCY-denominated loans.
Elsewhere, interest expense surged by 148.3% y/y to N283.22 billion, primarily driven by the elevated interest rate in the environment, which led to increased funding costs.
Accordingly, the Holdco’s interest cost on customers’ deposit holdings rose by 114.5% y/y to N220.47 billion, driven by deterioration in the group’s funding mix (CASA 2024FY: 83.6% vs FY-23: 88.6%).
At the same time, borrowing costs grew by 543.5% y/y to N47.34 billion.
Consequently, the net interest income rose by 142.4% y/y to N1.59 trillion. Ultimately, the net interest income (ex-LLE) settled 176.2% y/y higher at NGN921.92 billion, following an increase in loan impairment charges (+32.7% y/y to N136.66 billion).
Non-interest income (NII) grew by 42.1% y/y to N747.36 billion, spurred primarily by the fair value gains on financial instruments (+16.7% y/y to N515.55 billion). Aside from the fair value gains, the rise in the income generated from net fees and commission (+73.4% y/y to N189.71 billion) and FX trading (+31.1% y/y to N76.83 billion) further supported the income line. The expansion in NII, alongside the growth in net interest income, led to a 94.2% y/y increase in operating income to N1.67 trillion.
Further down, GTCO’s operating expenses grew by 60.9% y/y to N403.03 billion, with pressure stemming from personnel expenses (+89.4% y/y to N85.40 billion), technological costs (+48.4% y/y to NGN88.04 billion), and AMCON levy (+34.2% y/y to N36.66 billion). Nonetheless, the group maintained impressive operational efficiency, with the cost-to-income ratio (ex-LLE) settling at 24.2% (2023FY: 29.1%).
