Cost cutting measures and contributions from interest income, is responsible for Guaranty Trust Bank’s profit growth in the last quarter of the year amid a plunge in oil prices, rising incidence of bad loans and foreign exchange restrictions stunting the growth of companies in Africa’s largest economy.
The results were in sharp contrast to First City Monument Bank (FCMB), First Bank Holding and Diamond Bank which have issued profit warnings so far
For the year ended December 2015, Guaranty Trust’s net income increased by 5.29 percent to N99.43 billion from N94.43 billion the previous year.
The growth at the bank’s bottom line was due a 14.26 percent rise in interest income to N147.54 billion while total operating expenses remained flat at N82.65 billion.
This financial performance by the most efficient Nigerian lender is commendable given the profit warnings issues by some banks that Full Year earnings will falter on the back of macroeconomic headwinds and the tough operating environment.
GTBank, the largest lender by market value said earlier it will target retail customers and small to midsized companies in order to reduce exposure to oil and gas and reduce Non Performing Loans (NPL).
The Nigerian lender’s loans and advances increased by 7.87 percent to N1.37 trillion.
Guaranty Trust plans to expand to an additional East African country this year. The bank is currently operating in Kenya, Rwanda and Uganda as well as in six other countries outside of Nigeria.
The market reacted positively to Guaranty Trust earnings as its share price rose by 4 percent to N16.90 at 2:08 pm on the floor of the exchange while market capitalization was N498.8 billion.