September 23, 2025/Cordros Report
Guaranty Trust Holding Company Plc (GTCO) published its H1-25 financial results today, reporting a 50.4% y/y contraction in PAT to NGN449.01 billion (H1-24: NGN905.57 billion). The weak earnings performance was weighed by the steep decline in non-interest income and higher operating costs, undermining the 31.5% y/y core earnings growth. The Board proposed an interim dividend of NGN1.00/s (H1-24: NGN1.00/s), representing a dividend yield of 1.1% based on the last closing price of NGN93.00/s.
The group recorded a 31.5% y/y increase in interest income to NGN812.36 billion, supported by stronger contributions from investment securities (+43.6% y/y to NGN382.87 billion), loans to customers (+22.8% y/y to NGN297.49 billion), and cash and balances with banks (+22.6% y/y to NGN129.86 billion). We attribute this performance to the elevated interest rate environment and modest expansion in key earning assets – investment securities (+15.6% YTD to NGN4.79 trillion) and loans to customers (+20.5% YTD to NGN3.36 trillion).
Interest expenses rose by 42.5% y/y to NGN180.12 billion, reflecting higher costs on customer deposits (+44.2% y/y) and borrowings (+39.2% y/y). Nonetheless, net interest income ex-LLE grew by 38.6% y/y to NGN615.37 billion, aided by lower net impairment charges (-64.4% y/y to NGN16.87 billion).
Elsewhere, non-interest income declined sharply (-68.0% y/y to NGN244.02 billion). This was driven by the fair value loss of NGN4.44 billion compared to the gain of NGN493.02 billion recorded in the prior period. The preceding offset gains from fees and commissions (+33.7% y/y to NGN135.17 billion) and securities trading (+106.6% y/y to NGN10.42 billion), resulting in a 28.7% y/y contraction in operating income to NGN859.39 billion.
Operating expenses increased by 27.9% y/y to NGN258.49 billion, driven by higher personnel expenses (+31.1% y/y), AMCON levy (+38.7% y/y), and depreciation (+39.1% y/y). As a result, the cost-to-income ratio deteriorated to 30.1% (H1-24: 16.8%).
Overall, profitability was significantly weaker, with PBT declining by 40.1% y/y to NGN600.90 billion and PAT halving (-50.4% y/y) to NGN449.01 billion.
Comment: GTCO’s H1-25 results reflect the impact of naira stability, which curtailed fair value gains and weighed on non-core income. Nonetheless, the group delivered resilient performance in its core banking operations, supported by the high-yield environment. Looking ahead, 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. Our estimates are under review.
