Guaranty Trust Holding Company (GTCO) Plc reported a profit before tax (PBT) of ₦300.4 billion for the first quarter (Q1) ended 31 March 2025.
This performance was driven by robust growth in core earnings. Interest income calculated using the effective interest method rose by 41.3% year-on-year to ₦386.03 billion in Q1 2025, up from ₦273.20 billion in Q1 2024.
In addition, income from financial assets at fair value through profit or loss (FVTPL) grew by 34.3% to ₦11.36 billion. Combined, these gains lifted total interest income to over ₦397 billion, despite a 45.4% increase in interest expense to ₦79.03 billion.
As a result, net interest income jumped to ₦318.36 billion, a 40.0% improvement from ₦227.30 billion in the same period last year. This underscores efficient balance sheet deployment and improved yield on assets despite a challenging interest rate environment.
Loan Impairments and Credit Risk
Loan impairment charges remained elevated at ₦13.42 billion, only marginally lower than the ₦13.49 billion recorded in Q1 2024. This reflects lingering credit risk concerns and continued prudential provisioning by the Group in line with regulatory expectations.
Net interest income after impairment stood at ₦304.94 billion, a strong 42.6% increase over the previous year.
Non-Interest Revenue Growth
Fee and commission income increased significantly by 41.2% to ₦79.06 billion from ₦55.99 billion, reflecting robust transaction volumes and improved digital channel utilization. Fee-related expenses also rose to ₦7.76 billion, up from ₦3.74 billion. Nevertheless, net fee and commission income grew by 36.4% to ₦71.30 billion.
Trading gains on financial instruments contributed ₦20.25 billion, while other income stood at ₦26.54 billion.
It is worth noting that other income in Q1 2024 had been exceptionally high at ₦325.02 billion, possibly due to one-off gains, making the current figure appear weaker in comparison.
Operating Costs and Efficiency Pressures
Personnel expenses increased by 23.2% to ₦27.43 billion while depreciation and amortisation rose by 32.1% to ₦18.34 billion. Other operating expenses jumped 21.4% to ₦76.71 billion as rising inflationary pressures, currency devaluation impacts and increased compliance costs continued to impact operations.
Bottom Line Performance
Despite cost pressures, profit before tax (PBT) came in at ₦300.38 billion, down 41.0% from ₦509.35 billion in Q1 2024. The prior year’s unusually high other income appears to be the primary driver of the year-on-year decline.
After a tax expense of ₦42.35 billion, profit after tax stood at ₦258.03 billion, representing a 43.6% year-on-year decline. Excluding non-controlling interests, profit attributable to equity holders was ₦254.49 billion.
Earnings per share (EPS) for the period stood at ₦7.84, down from ₦16.23 a year earlier, reflecting the impact of the one-off items in the prior period.
Company-Level Performance
At the company level, Guaranty Trust Holding recorded a profit of ₦279.41 million, down slightly from ₦287.85 million in Q1 2024. Earnings per share for the holding company remained stable at ₦0.01.
Outlook and Strategic Considerations
Guaranty Trust Holding continues to show strength in interest-generating activities and fee-based income. However, the drop in other income and rising cost base highlight the need for cost optimization and sustainable non-interest income sources.
With macroeconomic conditions still volatile, management’s focus on digital transformation, regional expansion, and risk management will be critical in sustaining performance throughout the year.
