GTB's SELF GUARANTEE.

That financial year 2015 was tough in Nigeria, no one doubts now but companies responded differently. In the case of Guarantee Trust Bank (GTB) PLC the most natural thing was to issue a self guarantee to ensure a fair ending.
According to the audited figures released to the stock market on Friday, GTB more or less read the year well and did the immediate needful.
Sure like most big banks in Nigeria, its loan impairment provision took a leap within the year in view of macro economic depression but like a cork sailing in troubled waters, it stayed afloat all the same.
GTB's loan loss provision increased by 74.8% from N7098m in 2014 to N12408m with the flagship company in fact growing its own provision by 90.3% to N11769m.
For a group that recorded only 8.38% rise in gross earnings to N301851m from N278521m, this was indeed a huge load to carry.
To make matters worse, interest expense growth at 19% to N69290m was well ahead of interest income growth (14.3% to N229239m) and fee and commission expense growth at 45.6% to N3079m for the Group and 53.9% for the company, made a mockery of the group's 8.12% to N51866m and the company's 7.55% to N44035m in fee and commission within 2015.
Yet from the figures, GTB ended the year with a modest 3.70% increase in group profit before tax to N120695m from N116386m even as company profit growth rose by only 2.41% to N113027m. So how did GTB guarantee this?
Simple. It worked on expenses within management control to ensure no runaway. Here too the company led the way.
For example, pushed by 1.46% drop in the company's personnel expenses to N20728m from N21036m, group personnel cost grew by only 1.02% to N27722m from N27442m.
The same thing occurred in other operating expenses although less remarkably. This cost increased by only 1.86% to N54937m from N53931m as company's growth here was 1.69% to N47754m from N46961m.
In the end, what could have been a year of profit drop only ended with 40% gain on gross earnings as against 42.9% in 2014. A pinprick instead of a hammer
It was also no shaking in other areas 2015 delivered unexpected blow to banking and finance. The main one was the concentration of federal agency accounts in the Central Bank thus withdrawing huge deposits from most banks.
Well, in spite of this GTB's group customers deposits dropped by only 0.49% to N1610350m from N1618208m although the bank's own actually rose by 12.7% to N1422550m from N1261927m.
SO:
* Apparently, in 2016 GTB will be busy ensuring that even 2015 performance remains a bottom to bounce back from no matter all the signs that indicate that the worst was yet to come for Nigeria so long as crude oil price stays down.
* Income drops like 52.4% decrease in other income to N8511m from N17864m have also to be checked somehow to remove even the pinprick.

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