Guaranty Trust Holding Company (GTCO) H1 2024 earnings summary

Executive summary

• Half-year 2024 results significantly exceeded expectations, with profit before tax rising 206.6% to ₦1.00 trillion and profit after tax up 223% to ₦905.6 billion, surpassing full-year guidance.

• Gross earnings surged 107% year-over-year to ₦1.39 trillion, driven by strong growth in both interest and non-interest income.

• Total assets increased 49.7% to ₦14.5 trillion, with net loans up 25.5% and customer deposits up 38.4% year-over-year.

• The group operates across banking, payments, pension, and asset management, with subsidiaries in multiple African countries and the UK.

• Management maintains its original FY 2024 guidance, citing a consistent policy of not revising guidance mid-year regardless of performance.

Financial highlights

• Interest income up 173% year-over-year; non-fund income up 73% year-over-year to ₦774.7 billion.

• Net interest margin improved to 10.45% from 7.76% year-over-year, with NIM guidance for the year at 11%.

• Cost-to-income ratio dropped to 16.1%–16.74% due to strong revenue and cost discipline; operating expenses up 16% in a high inflation environment.

• Return on equity soared to 93.44% and return on assets to 14.97% as of June 2024.

• Earnings per share rose to 3,212 kobo, and interim dividend of ₦1.00 per share was declared.

Outlook and guidance

• FY 2024 guidance remains unchanged despite outperformance at half-year; management emphasizes discipline and tradition.

• Loan growth target is 30% for the year, but actual organic growth (ex-devaluation) is 6%.

• Non-banking subsidiaries expected to contribute 2-3% to group performance by year-end.

• Dividend payout ratio remains at 50%, with expectations for a healthy year-end dividend as forbearance loans are fully provided for.

• Continued focus on sustainable growth, digital innovation, and risk management.