Nigeria’s largest commercial bank in terms of market capitalization, GT Bank released its 2017 9 months results on Wednesday. The bank reported a pre-tax profit of N150 billion, the highest it has ever reported in the first 9 months of any year.
A cursory look at the result reveal the bank earned about N248.2 billion from interest income alone, representing a 36% increase from the N181.9 billion recorded in the same period in 2016.
A further analysis also reveal that out of the N242.8 billion reported during the period, N153.6 billion was from loans and advances to its customers, representing 63% of Interest income. Interest income from loans and advances was 77% in the same period in 2016.
The big leap was in the banks earnings from investment in Securities held for sale and to maturity. These are typically investments in short-term securities such as treasury bills and longer term investments such as FGN bonds. The bank reported that it earned about N75 billion, a 134% increase from the N32 billion reported the same period in 2016. Treasury bills alone accounted for over N66 billion.
GT Bank CEO, Segun Agbaje had indicated earlier in the year that the bank would be adopting a strategy of reducing its loan portfolio while ramping up investment in government securities.
The bank’s balance sheet reveals that it had about N561 billion (2016 FY N528 billion) in investment securities out of which about N473.7 billion was invested in treasury bills. In contrast, GT Bank reduced its loan portfolio from N1.58 trillion in 2016 to about N1.42 trillion at the end of September 2017. The banks deposit from customers also dropped from N1.98 trillion to N1.89 trillion between December 2016 and September 2017 respectively.
GT Bank is one of the most profitable bank in Nigeria. It is also one of the best performing stock this year, gaining about 68% this year alone. The share price closed flat at N41.7 after the result was announced.