GUARANTEE TRUST BANK LEANS ON FOREX'S STRONG SHOULDERS

Guarantee Trust Bank PLC should be reeling under the weight of quantum leap in bad debts provision right now but it is not because of the strong shoulders offered by foreign exchange related income or gain.

According to the figures for the nine months to September released this week, GTB  increased provision for doubtful debts (impairment) to N57083.3m from only N8515.6m at the same time in 2015.

In view of the fact that interest income grew by only 5.17% to N181909.5m although accompanied by 6.95% drop in interest expense to N49161.2m; this kind of great leap in impairment should have been a life threatening one.

More so, when loans and advances to customers grew by only 19.6% to N1640258.3m within the period.

But it is not, according to the unaudited figures principally because income from foreign exchange related business or revaluation grew at a faster rate.

Indeed, by September, forex related income and gain contributed 31% of gross earnings compared to only 8.24% by September 2015 as core revenue from interest income contributed only 55.2% compared to 75.4% previously.

No doubt, the record increase in forex related income was due mainly to paper profit of N96639.7m  as part of Other income from revaluation of financial assets compared to only N6774.3m such gain same time in 2015.

No other income growth was in the class of revaluation gain. The closest was 147.7% increase in money transfer income to N3702.1m and 75% rise in E business income to N23180.8m.

Much the same way and good for GTB too, no growth in any other expense was in the class of that in impairment provision.

Closest growth was 19.2% increase in operating lease expense to N1324.6m followed by 8.98% growth in Other operating expenses to N45867.6m.

Personnel costs increased by only 1.31% to N21772.6m while fee and commission expense rose by 7.32% to N2275.9m.

There was 69.2% drop in net trading income to N3013.8m which could have been hard to absorb too but for the booty from revaluation.

Hence, GTB's profit before tax closed the nine months at N140837.2m; up 53% and well ahead of 43.6% increase in gross earnings to N329283.6m

Yet, another major income stream within the period was yet to be classified as part of main stream income statement. This was the N25413.6m recorded as foreign exchange transaction difference within the period as against only N787.5m previously.

GUARANTEE TRUST BANK: Nm
                       Nine months
                         2016.           2015
Gross invome329283.6. 229375.4
Interest inc.   181909.5.  172963.7
Interest cost    49161.2   52834.0
Impairment.    57083.3.    8515.6
Fee and comm.50410.3   39657.4
" expense.          2275.9.    2120.7
Net trading inc. 3013.8.    9793.7
Other income  93950.0.    6957.6
Personnel        21772.6.   21491.4
Op. Lease          1324.6      1111.3
Other op. Exp  45867.6   42088.4
Profit b4 tax.  140837.2. 92062.2
Loans            1640258.3 1371925.5

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