27 Jun 2008 17:00
Guaranty Trust Bank plc
Unaudited results for the first quarter ended 31 May 2008
The Board of Directors of Guaranty Trust Bank Plc is pleased to announce the Bank's unaudited results for the first quarter ended 31 May 2008.
| First Quarter Ended | First Quarter Ended | Increase/ | |
| 31 May 2008 | 31 May 2008 | (Decrease) | |
| (N'000) | (N'000) | % | |
| Gross Earnings | 27,961,091 | 14,882,624 | 88 |
| Profit Before Tax | 12,298,777 | 5,094,939 | 141 |
| Estimated Taxation | 3,935,609 | 1,630,380 | 141 |
| Profit After Tax | 8,363,168 | 3,464,558 | 141 |
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 quarter with gross earnings of N28.0 billion, which represents a growth of 88% compared to the prior year figure of N14.9 billion. This performance was due largely to the achievement of a growth of 101% on the interest income line compared to the prior year figure of N9.3 billion. The growth in interest income was primarily as a result of growth of Loans and Advances, which in turn resulted in higher asset yield.
The Bank achieved only 77% of its prior year volume of Investments and Placements. However the stronger performance on the Loans and Advances line, which is higher yielding, compensated for the shortfall on the Investments and Placements line.
The Bank also performed well on the Other Banking income line. It grew by 66% compared to the prior year figure of N5.6 billion. This substantial growth resulted primarily from the growth in the Bank's Loans and Advances; this had major impact on the Commissions on Turnover, Other Commissions and Fees. However, the growth in Loans and Advances also contributed to the negative variance on the Loan Loss expense line, which comprises specific and general loan loss expenses. The general loan loss expense, which constitutes 99.7% of total loan loss expense, is the statutory 1% provision expense on performing loans.
The Bank's operating expenses also increased by 80% compared to the prior year and this is attributable largely to the deteriorating state of the power supply and other infrastructural facilities in the country.
In summary, the growth of 88% in Interest Income and only 25% in Interest Expense resulted in a growth of 172% in Net Interest Income compared to the prior year figure of N4.8 billion. However, with the growth in Loans and Advances and the attendant increase in General Loan Loss Expense, the growth in Net Interest Margin was 166% compared to the corresponding period last year. With the addition of 66% growth in Other Banking Income, the total revenue grew by 111% compared to the prior year figure. Given this impressive performance on the revenue lines, the Bank exceeded its prior year Profit Before Tax of N5.1 billion by 141% to close the quarter at N12.3 billion.
Balance sheet performance
The Bank achieved a growth of 95% to close the quarter with a Total Assets and Contingents of N1.27 trillion from N0.65 trillion at the same period last year. This also represents a growth of 21% compared to the February 2008 figure of N1.05 trillion.
The growth in Other Liabilities of 100% compared to February 2008 figure was as a result of a major transaction carried out on behalf of Dangote Cement Works towards the end of the quarter. The company opened a $1.2 billion (N141 billion) LC in favour of Sinoma International Engineering, Naijing, China.
The Bank's Deposit Liabilities' mix improved significantly during the quarter. The ratio of low cost funds to total liabilities improved from 53% as at February 29, 2008 to 67% as at May 31, 2008.
Subsequent to the issue of GDRs worth N104 billion in 2007, the Bank has been able to consistently grow its loan portfolio. The Bank grew its total loan portfolio by 22% from the year-end position of N300 billion to N366 billion. This growth as mentioned earlier, contributed positively to the growth in interest and discount income.
The Bank has intensified its monitoring of the loan portfolio as a result of its substantial growth.
27 June 2008
Enquiries:
| GTBank | +234-1-2714591 | |
| Lola Odedina, Head, Communications & External Affairs | ||
| Pascal Or | ||
| College Hill | 020 7457 2020 | |
| Richard Pearson | ||
| Francesca Tuckett | ||
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.
www.gtbank.com