GTCO 2025 H1 Profit Falls By 50% As Operating Expenses Surge By 27.9%

Guaranty Trust Holding Company Plc (GTCO) profit fell by more than 50% in the first half of financial year 2025, its audited report submitted to the Nigerian Exchange (NGX) on Tuesday revealed.

Details from the group’s audited earnings scorecard revealed that profit after tax declined by 50.4% year on year to N449.01 billion from N905.57 billion in the comparable period in 2024.

The weak earnings performance was weighed down by the steep decline in non-interest income and higher operating costs, analysts said in a review note.  These undermined 31.5% year on year core earnings growth in the period.

The Board proposed an interim dividend of N1.00/s, the same amount paid in the equivalent period in 2024, representing a dividend yield of 1.1% based on the last closing price of N93.00/s.

Net interest income grew by 28.6% year on year to N632.24 billion at the end of the first half of 2025, from N491.51 billion in the equivalent period in 2024.

The stronger net income was driven by 31.5% growth in  interest income, settling at N812.36 billion, from N617.89 billion—supported by stronger contributions from investment, loans to customers and cash and balances with banks.

Investment securities climbed by 43.6% year on year to N382.87 billion, while bank earnings from loans to customers increased by 22.8% to N297.49 billion. Income earned from cash and balances with banks surged by 22.6% to N129.86 billion in the period.

Analysts at Cordros Securities limited attribute this performance to the elevated interest rate environment and modest expansion in key earning assets.

Year to date, GTCO investment securities spiked by 15.6% to N4.79 trillion and loans to customers expanded by 20.5% in the same period to N3.36 trillion.

On the funding side, interest expenses rose by 42.5% year on year to N180.12 billion, reflecting higher costs on customer deposits and borrowings.

Nonetheless, net interest income ex-LLE grew by 38.6% y/y to N615.37 billion, aided by lower net impairment charges. Despite forbearance regulation pressures in the industry, GTCO impairment charge declined by -64.4% year on year to N16.87 billion.

Elsewhere, non-interest income declined sharply, down by 68.0% year on year to N244.02 billion at the end of first half of 2025.  Analysts at Cordros Securities Limited said this was driven by the fair value loss of N4.44 billion compared to the gain of N493.02 billion recorded in the prior period.

The group huge fair value loss offset gains from fees and commissions and securities trading, resulting in a 28.7% year on year contraction in operating income to N859.39 billion.  Fees and commission income grew by 33.7% to N135.17 billion, income from securities trading expanded by 106.6% to N10.42 billion.

Further details revealed that GTCO operating expenses increased by 27.9% year on year to N258.49 billion, driven by higher personnel expenses, AMCON levy and depreciation. As a result, the cost-to-income ratio deteriorated to 30.1%, from low of 16.8% achieved in the comparable period in 2024.

Overall, profitability was significantly weaker, with pre-tax profit declining by 40.1% year on year to N600.90 billion, while profit after tax slumped by -50.4% to N449.01 billion.

Commenting, Cordros Securities Limited said GTCO’s H1-25 results reflect the impact of naira stability, which curtailed fair value gains and weighed on non-core income.The group delivered resilient performance in its core banking operations, supported by the high-yield environment.

Analysts anticipate that elevated interest rates and growth in earning assets are expected to remain supportive, although rising cost pressures and weaker non-interest income present downside risks