BREAKING: GTCO pre-tax profits hit N1.2 trillion in first 9 months of 2024

GTCO Plc released its third-quarter results, showing that pre-tax profits rose to N215.69 billion, compared to N105.8 billion recorded in the corresponding quarter of 2023.

These third-quarter profits helped boost the financial holding company’s nine-month pre-tax profits to N1.2 trillion — the highest on record in the financial services sector, following the N1 trillion milestone achieved in the first half of the year.

The nine-month performance also enabled the bank to reach N1 trillion in profit after tax for the first time, making it the first bank to achieve this milestone.

The bank reported total assets of N15.6 trillion for the first time in its history, while net assets also rose to N2.62 trillion — another all-time high for the company.

Key Highlights (third quarter)

• Net Interest Income: N362.4 billion, +143.9%, YoY
• Loan Impairments: N16.16 billion, +148.5%, YoY
• Net Fees and Commission: N57.4 billion, +85.8%, YoY
• Pre-tax Profits: N215.69 billion, +103.9%, YoY
• Loans and advances: N3 trillion, +36.1, YoY
• Total Deposits: N11.2 trillion, +77%, YoY
• Total Assets: N15.6 trillion, +81.3%, YoY
• Net Assets: N2.6 trillion, +106.8%, YoY

Commentary 

A cursory review of the results reveals that GTCO reported a pre-tax profit of N215.6 billion in the quarter under review.

• While this figure more than doubled the profit reported a year earlier, it fell below the N509.3 billion and N494.4 billion recorded in the first and second quarters of the year, respectively.
• A deeper analysis of the company’s financial statement shows that the drop in pre-tax profits was due to a decline in its other operating income, which swung to a N52.8 billion loss from a N305.3 billion profit in the second quarter.
• This income line also contributed N324.9 billion in the first quarter of the year. Notably, the company reported an “unrealised gain on forward transactions” of N32.1 billion for the first nine months of this year, down from N130.2 billion in the first six months.

Despite this decline, the HoldCo crossed the N1 trillion profit after tax mark for the first time ever, becoming the first in the financial services sector to achieve this milestone.

• GTCO’s net interest income rose to N781.48 billion, marking a substantial 162.6% year-on-year increase.
• This growth was driven by an increase in interest-earning assets or higher rates, allowing GTCO to benefit from a favorable interest environment.
• This strong performance in net interest income highlights GTCO’s effective asset allocation strategy, which leaned towards fixed income securities amid rising interest rates.
• Net fee and commission income almost doubled to N158.55 billion, reflecting a 92.2% year-on-year increase.
• This rise in fee-based revenue underscores GTCO’s diversification strategy, with income generated from non-interest sources such as credit-related fees and commissions, e-business income, account maintenance charges, transaction fees, ancillary banking charges, and other services.
• In an industry where margins on traditional lending can be thin, this strong growth in fee income reflects GTCO’s adaptability and engagement with its customer base.