2017 GUARANTEES FOR GTB

Guaranty Trust bank PLC (GTB) seems to have found new guarantees from the year 2017 to do away with paper profit and relatively high bad debts provision.

According to half year results released this week, from around 1.94% rise in gross earnings to N213.9bn, a profit before tax growth of 18% to N101.1bn has been harvested mainly because interest income jumped by 51.1% to N165.88bn; and bad debts provision dropped by 80.8% to N7.12bn.

The leap in interest income was accompanied by only 18.5% growth in interest expense to N36.3bn.

In addition, personnel cost increased by only 12.8% to N16.36bn; operating lease expenses rose by only 24.4% to N749.5m and Other operating income closed the half year 31.5% up at N42.82bn.

With the marked drop in bad debts provision, net interest income growth and doubling of net gains from trading to N5663.6m; it was easy for GTB to absorb these cost growths and also accommodate 90.1% drop in profit from forex related revaluation (paper money, in the main) to N6.06bn which led to 76.7% decline in Other income to N14.36bn compared to N61.67bn GTB leaned on at the same time in 2016.

There was also a separate impairment provision of N646.2m for financial assets but that too was a walk over.

And so, GTB  ended the half year with 16.6% growth in distributable profit from which have recommended payment of interim dividend of 30k per share.

It could get better in the second half because GTB'S income stream from forex trading, as against revaluation, grew by 87.1% ; from Treasury bills leap frogged N1.93bn and bond trading income also grew well by 50.5%. Decoded: Once existing operating environment with CBN trying all its best to see banks through today's difficult terrain continues, 2017 full year should end with guaranteed more smile for stakeholders.

GTB: Half year Nbn
                                     2017.            2016
Gross earnings.      213.94.        209.87
Interest income.     165.88.        109.78
Interest expense.      36.34.          30.66
Impairment                  7.12.           37.54
Fee & commission.  28.03.           36.46
         " Expense.           0.965.           1.27
Other income.           14.36.           61.67
Impairment on assets 0.646.           -
Personnel cost.         16.37.           14.51
Operating lease.          0.749.           0.602
Other operating cost 42.83.           32.58
Profit before tax.      101.10.          85.69
Profit after tax.           83.68.          71.77


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