GTB Beats Expectations, Posts N42bn Profit in Q1

• GTB Beats Expectations, Posts N42bn Profit in Q1

The Guaranty Trust Bank on Wednesday surprised investors with an impressive performance in the first quarter (Q1) of the year.

The bank’s gross earnings rose from N73.4 billion recorded in the first quarter of 2016 to N104.7 billion in Q1 of 2017. Up by 38.8 percent.

Net interest income also improved by 62.1 percent to N66.1 billion from N40.8 billion recorded in 2016, while credit impairment surged 12.6 percent from N3.4 billion recorded in 2016 to N3.8 billion in 2017.

However, the bank recorded N50.4 billion profit before tax in the first quarter of 2017, which is 64.3 percent higher than N39.7 billion recorded in 2016. Profit after tax stood at N41.5 billion, up from N25.6 billion recorded in the same quarter in 2016.

Commenting on the results, analysts said: “Q1 2017 PBT of N50 billion grew by 64 per cent while PAT more than doubled to N41billion, thanks to a positive result on the other comprehensive income line of N568 million (compared with a sizeable loss of N5.3 billion a year earlier).”

According to the analysts at FBN, the main factor behind the strong performance was the net interest income. “Although loan loss provisions of N3.8 billion and opex of N32 billion both grew by 13 per cent and 24 per cent respectively, these increases were not sufficient to make any material impact on the results. Sequentially, the non-interest income result stood out because the Q4 result had been negatively impacted by reversals of FX gains and one-offs. In contrast, non-interest income (which had boosted the bank’s results through most of 2016 on the back of FX-related gains) was up only five per cent,” they said.

They further stated that “Both PBT and PAT were 17-18 per cent ahead of our forecasts because of the strong net interest income result which surprised positively by 15 per cent. The only other notable positive surprise was loan loss provisions. GTBank booked 16per cent less in provisions than we had forecast. Having said that, given the volatility that is inherent on this line, and that this is only the first quarter of the year, we would not make too much of this variance. Non-interest income and opex were close to our forecasts.”