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FX Gains Push GTCO 6-Month Profit 217% to N327 Billion



FX Gains Push GTCO’s 6-Month Profit 217% to N327 Billion

Guaranty Trust Holding Company (GTCO) Plc’s profit before tax (PBT) settled at N327.4 billion in the first half of 2023, rising by 217% from N103.25 billion in the comparative period of 2022.

With its income tax expenses also rising by 82.6% to N46.92 billion from N25.69 billion the previous years, the lender’s profit for the year settled at N280.482 billion, higher than N77.557 billion in the comparable period of 2022, a push that was majorly supported by net foreign currency revaluation gain.

The group’s bottom line was also supported by more than N51.548 billion net fees and income, representing 8.8% year-on-year growth from N47.363 billion reported in the comparable period in 2022.

According to the group financials, net income rose to N177.458 billion in the period, from N120.848 billion a year earlier, representing an increase of 46.84% amidst a high interest rate environment.

Due to the steep size of stage 2, and stage 3 loans, GTCO impairment charges rose significantly to N82.961 billion in the first half of the year, an increase of about 2256% from about N3.52 billion in the comparable period.

The group recorded more than N357 billion revaluation gain from its net foreign currency holdings, its first half of 2023 audited financial statement filed with regulators showed.

The amount, which appeared as an exceptional development in the audited results, was part of items that were included in the group’s other income line.

The audited half-year result showed that other income item figures rose by about 262% year on year, a development that is rarely seen under normal business conditions.

According to the financial services group’s financial result for the period, other income surged by about 2500% to N372.223 billion from N14.413 billion in the comparable period.

Meanwhile, FX revaluation gain accounted for more than 96% of GTCO’s other income items on the income statement in the period.

Specifically, the Holdco financial scorecard showed that in 12 months, its foreign exchange revaluation surged from N1.868 billion to N357.471 billion following the official devaluation of the Nigerian naira in June 2023.

GTCO said the amount relates to unrealised gain in the period. Also, the group equity size increased to N1.2 trillion in the first half of 2023, from N931 billion in the comparable period.  The growth came from a spike in retaining earnings and other components of the Holdco equities.

A review of the capital level as of 30 June 2023 shows that GTCO complies with regulation, which stipulates that a financial holding company should maintain a minimum paid-up capital that equals/exceeds the aggregate of the minimum paid-up capital of all its subsidiaries.

In the first half of the year, the Group’s capital adequacy ratio was 24.70%, a surge from 24.08% reported in the financial year end 2022.

Guaranty Trust

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