Guaranty Trust Holding Company Plc (GTCO) has reported an N85.07 billion decline in profit after tax (PAT) for the nine months ended September 30, 2026, as rising interest costs, higher tax expenses and weakening net interest income weighed on the financial services group’s earnings despite continued growth in customer deposits.
The group’s unaudited financial statements, filed at the Nigerian Exchange Limited (NGX) on Tuesday, showed that the PAT fell by 12.2 per cent to N614.57 billion, compared with N699.64 billion recorded in the corresponding period of 2025.
Profit before tax also declined by 2.3 per cent, from N900.80 billion to N879.90 billion, reflecting growing pressure on profitability even as the group maintained a substantial earnings base.
An analysis of the financial statements by BUSINESS METRICS showed that GTCO’s interest expense surged by 27.7 per cent to N356 billion, from N278.73 billion a year earlier, significantly outpacing growth in interest income.
Total interest income increased by approximately 5 per cent to N1.29 trillion, compared with N1.23 trillion in the first nine months of 2025, but the higher cost of funds eroded the gains, pushing net interest income down by 1.7 per cent to N935.88 billion from N952.14 billion.
The deterioration was compounded by a sharp increase in income tax expense, which rose by 31.9 per cent to N265.32 billion from N201.16 billion, representing an additional N64.16 billion tax burden during the period.
Consequently, the group’s effective tax rate increased from approximately 22.3 per cent in the corresponding period of 2025 to 30.2 per cent in 2026, further widening the decline in after-tax earnings.
The impact was also reflected in returns to shareholders, with basic earnings per share falling to N16.58 from N20.71, representing a decline of nearly 20 per cent.
Rising Operating Costs Deepen Earnings Pressure
Beyond interest and tax expenses, GTCO recorded increases in several operating cost categories, further constraining profitability during the review period.
Other operating expenses rose by 6.5 per cent to N228.83 billion from N214.88 billion, while depreciation and amortisation expenses increased by 41 per cent to N82.46 billion, compared with N58.49 billion in the corresponding period of 2025.
However, personnel expenses declined by 3.4 per cent to N88.51 billion from N91.61 billion, providing some relief to the group’s overall cost structure.
The results also showed that net fee and commission income remained largely flat at N182.42 billion, compared with N183.22 billion a year earlier, despite gross fee and commission income increasing marginally to N213.55 billion.
Similarly, other income declined by 12.9 per cent to N74.78 billion from N85.85 billion, although net trading gains on financial instruments improved slightly to N79.63 billion from N77.21 billion.
A notable positive development was the reduction in loan impairment charges, which fell by 58.4 per cent to N29.02 billion from N69.79 billion in the corresponding period of 2025.
This improvement helped cushion the impact of declining net interest income, with net interest income after loan impairment charges rising to N906.86 billion from N882.35 billion.
The figures suggest that GTCO’s earnings challenges during the period were driven more by funding costs, taxation and operating expenses than by increased loan impairment charges.
Third-Quarter Profit Falls 20%
A separate analysis of the group’s performance for the three months ended September 2026 revealed a sharper deterioration in quarterly earnings.
GTCO recorded N200.39 billion in profit after tax during the third quarter, representing a 20 per cent decline from N250.63 billion in the corresponding quarter of 2025.
Quarterly profit before tax also fell by 7.7 per cent to N276.86 billion from N299.90 billion, while interest expense jumped by 34.1 per cent to N132.21 billion from N98.61 billion.
This occurred despite interest income remaining virtually unchanged at approximately N418.49 billion, highlighting the growing pressure from the cost of funds.
Net interest income consequently declined by 10.5 per cent to N286.28 billion from N319.90 billion.
The quarterly results further showed that income tax expense increased by 55.2 per cent to N76.48 billion from N49.27 billion, intensifying the decline in profit after tax.
Customer Deposits Rise N1.18tn as Loan Book Contracts
Despite the pressure on profitability, GTCO maintained growth in its balance sheet, supported largely by increased customer deposits.
The group’s total assets rose by 3.5 per cent to N18.37 trillion as of September 30, 2026, compared with N17.76 trillion at the end of December 2025.
Customer deposits increased by N1.18 trillion, representing growth of 9.4 per cent, from N12.55 trillion to N13.73 trillion over the nine-month period.
However, loans and advances to customers declined by 4.1 per cent to N3 trillion from N3.13 trillion at the beginning of the year, indicating that growth in customer deposits was not accompanied by a corresponding expansion in the reported loan book.
The group’s total equity also increased marginally to N3.48 trillion from N3.41 trillion, while retained earnings rose to N1.79 trillion from N1.72 trillion.
Meanwhile, net cash generated from operating activities declined to N964.61 billion from N1.15 trillion in the corresponding nine-month period of 2025.
The financial statements further showed that GTCO recorded a net foreign currency translation loss of N167.60 billion on its foreign operations, compared with a translation gain of N19 billion in the corresponding period of 2025.
After accounting for other comprehensive income and related taxes, total comprehensive income declined by 34 per cent to N495.03 billion from N750.38 billion.
Overall, GTCO’s nine-month performance reveals a widening disconnect between balance-sheet growth and earnings performance, as stronger customer deposits and lower loan impairment charges failed to offset the combined impact of rising funding costs, taxation and other expenses.
With the group’s profit after tax declining by 12.2 per cent over nine months and 20 per cent in the third quarter alone, its full-year performance will depend significantly on its ability to contain funding and operating costs while sustaining income growth.