October 28, 2026/Cordros Report
Guaranty Trust Holding Company Plc (GTCO) published its unaudited 9M-26 financials yesterday, reporting a 12.2% y/y decline in profit after tax (PAT) to NGN614.57 billion (9M-25: NGN699.64 billion). The decline reflected higher interest, operating and tax expenses, alongside lower non interest income.
Interest income grew 5.0% y/y to NGN1.29 trillion (9M-25: NGN1.23 trillion), supported by a 62.2% y/y increase in income from cash and balances with banks, which more than offset declines in interest income from loans and advances to customers (-3.6% y/y) and investment securities (-7.8% y/y). The decline in investment securities income reflected lower yields in the fixed income market. Interest income from securities held at amortised cost and FVOCI declined by 26.0% y/y and 3.1% y/y, respectively, despite increases of 16.1% y/y and 2.6% y/y in their respective holdings. These declines more than offset the 83.9% y/y increase in income from FVTPL securities, which rose alongside an increase in the underlying portfolio to NGN998.74 billion (9M-25: NGN114.97 billion).
Meanwhile, interest expense increased by 27.7% y/y to NGN356.00 billion, driven primarily by a 42.5% y/y increase in interest on customer deposits to NGN325.25 billion and a 16.4% y/y rise in interest on deposits from financial institutions. Notably, interest expense on deposits from financial institutions surged by 550.1% q/q. These increases were partly moderated by a 91.4% y/y decline in interest expense on borrowings. Consequently, cost of fund rose to 3.5% in 9M-26 (2025FY: 3.4%).
Net interest income declined by 1.7% y/y to NGN935.88 billion. However, the 58.4% y/y decline in impairment charges provided some relief, supporting a 2.8% y/y increase in net interest income after impairment charges (ex-LLE) to NGN906.86 billion. Accordingly, net interest margin declined to 11.4% (2025FY: 12.3%).
Further down, non interest income declined by 2.7% y/y to NGN336.84 billion, as an 88.8% y/y decline in foreign exchange revaluation gains and a 0.4% y/y decrease in net fees and commission income outweighed increases in trading gains on investment securities (+3.4% y/y) and FX trading gains (+3.1% y/y). Consequently, operating income grew by 1.1% y/y to NGN1.28 trillion.
Meanwhile, operating expenses expanded by 9.5% y/y to NGN399.81 billion, reflecting higher AMCON levies (+9.8% y/y), deposit insurance premiums (+10.1% y/y) and depreciation and amortisation (+41.0% y/y), while personnel expenses declined by 3.4% y/y. The increase in operating expenses outpaced operating income growth, resulting in a deterioration in the cost-to-income ratio to 31.2% (9M-25: 28.8%).
Overall, profit before tax declined by 2.3% y/y to NGN879.90 billion, while PAT declined by 12.2% y/y to NGN614.57 billion (9M-25: NGN699.64 billion), reflecting the impact of higher income tax expense, which increased by 31.9% y/y to NGN265.33 billion.
Comment: GTCO’s 9M-26 performance reflected pressure on core earnings, alongside a decline in non-interest income. Looking ahead, we expect a gradual expansion of the bank’s balance sheet, particularly its loan book, to provide moderate support for interest income, complemented by continued growth in its investment securities portfolio. However, we expect the moderation in asset yields to keep net interest margin under pressure. Meanwhile, net fee and commission income should provide some support to earnings as loan growth gains traction, driving an increase in related fee income. Our estimates are under review.
