GRTB.L Regulatory News (GRTB)

19 Sep 2008 17:13



Guaranty Trust Bank plc 

Unaudited results for the six months ended 31 August 2008

The Board of Directors of Guaranty Trust Bank Plc is pleased to announce the Bank's unaudited results for the six months ended 31 August 2008. The results are unaudited as a result of the year end change from February to 31 December, bringing Guaranty Trust Bank in to line with international best practice as now adopted by most international banks. 

The Bank recorded significant improvement in its financial results relative to the corresponding period last year. Management is confident that barring unforeseen circumstances, this trend would be maintained in the remaining periods of the financial year.

Financial Performance

The Bank ended the second quarter with gross earnings of N57.2 billion, which represents a growth of 73 per cent over the prior year figure of N33.01 billion. This performance was due largely to the achievement of N40.2 billion on the interest income line, which represents a growth of 113 per cent over prior year figure of N18.8 billion. The growth in interest income was as a result of growth in Short term Investments, Placements and Loans and Advances. During the period, the economy experienced high illiquidity which led to high interest rates. This also contributed to the impressive interest income reported by the bank for the period.

The Bank's Other Banking Income line grew by 25 per cent from prior year figure of N13.63 billion to N17.03 billion. This growth resulted primarily from the growth in the Bank's Loans and Advances; this had major impact on the Commissions on Turnover (COT), Other Commissions and Fees. In addition, COT rates for various sectors were reviewed during the period, whilst efforts were made to consciously minimize COT concessions.

The Bank's operating expenses increased by 75 per cent from N11.2 billion at the end of the period last financial year to N19.5 billion in the current period. The branch expansion drive and inflationary pressures in the economy accounted for this increase. However, our conscious effort at cost containment helped to limit the increase.

From the performance on the various lines above, the Bank grew its Profit Before Tax by 109 per cent from N11.0 billion to N23.0 billion.

Balance Sheet Performance

The Bank grew its Total Assets and Contingents by 43 per cent from N0.8 trillion in the previous year to N1.2 trillion in the current period and 14 per cent over the February 2008 figure of N1.0 trillion. 

As earlier mentioned, the major growth on the balance sheet was from loans and advances. The Bank's loans portfolio as at the end of the period was N373.8 billion, which represents 90 per cent growth from the prior year figure of N197.2 billion. The Bank also performed very well on the Investments and Placements line, which closed at N163.5 billion at the end of the period. 

The Bank could only achieve a growth of 45% on the Deposit Liabilities line, growing to N390.9 billion from N269.9 billion at the same period last year. This was due primarily to the illiquidity experienced in the system during the period, which saw most banks playing the price game. The bank chose not to join the others in order to preserve its net interest income. However, we believe that with aggressive marketing efforts, as well as continuous branch expansion, the bank's deposit liabilities would improve significantly by the end of the financial year.

19 September 2008

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Notes to editors

The Group operates as one of the leading Nigerian banks offering a wide range of financial services and products throughout Nigeria and in the West African sub-region. According to the most recently published audited financial statements of Nigerian banks prepared in accordance with Nigerian GAAP, among Tier 1 banks in Nigeria as identified by Agusto & Co., the Bank is the most profitable bank measured in terms of return on assets, the most efficient bank measured in terms of cost to income, has the second best asset quality measured in terms of non-performing loan ratio and, among all banks in Nigeria, the Bank is the sixth largest bank in terms of total assets. 

Historically, the Group has focused its business on large- and medium-size corporate clients. However, the economic reforms that followed Nigeria's return to democracy in 1999 led to an increase in liquidity of retail customers and a corresponding increase in demand by such customers for banking services. As a consequence, since 2005, the Group has placed an increasing emphasis on building its retail business. Initially the Group targeted only high-end retail customers that were employed by large, reputable companies. Recently, the Group has re-branded itself to emphasise its retail focus, in particular its evolution as a bank with a nationwide network and focus on the provision of banking services to nearly all segments of the Nigerian economy.

The Bank has four banking subsidiaries established outside of Nigeria - Guaranty Trust Bank (Gambia) Ltd ("GTB Gambia"), Guaranty Trust Bank (Sierra Leone) Ltd ("GTB Sierra Leone"), Guaranty Trust Bank (Ghana) Ltd ("GTB Ghana") and Guaranty Trust Bank (United Kingdom) Ltd ("GTB UK"). The Bank services its customers from 120 branches in Nigeria, as well as other branches of its subsidiaries throughout the region. The Bank has four non-banking subsidiaries: Guaranty Trust Assurance Plc ("GTB Assurance"), which provides insurance services in Nigeria, GTB Registrars Limited ("GTB Registrars"), a securities registrar, GTHomes Limited ("GTHomes"), which provides mortgage services and GTB Finance B.V. ("GTB Finance"), a finance subsidiary located in The Netherlands. In each of the past three years, profit from the Bank accounted for over 90.0% of the Group's total income.

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