GTCO sees 12% drop in profit due to rising costs

Guaranty Trust Holding Company (GTCO) has reported a 12.2 percent drop in net profit for the nine months ending in September, compared to the same time last year. The rise in costs has hit their earnings hard, according to their unaudited accounts released on Tuesday.

The financial group saw a boost in interest income, which is their main way of making money. But they also faced higher interest expenses, which shot up by 27.7 percent compared to last year.

Interest expense made up 27.6 percent of interest income, compared to 22.6 percent a year ago.

As a result, net interest income, which is the money banks make from interest minus what they pay to depositors, fell to N935.9 billion from N952.1 billion.

The banking group also set aside N29 billion for bad debts, which is down by 58.4 percent.

Net fee and commission income dropped slightly by 0.4 percent to N182.4 billion, even with a rise in gross fee and commission income due to increasing costs.

Depreciation and amortisation costs rose by 41 percent to N82.5 billion. This increase followed a significant rise in property equipment depreciation. Other operating expenses went up by 6.5 percent to N228.8 billion, which affected their pre-tax profit.

Other income decreased by 12.9 percent to N74.8 billion. This was mainly because of unrealised losses on financial instruments and a weaker unrealised foreign exchange revaluation gain.

Profit before tax fell to N879.9 billion from N900.8 billion.

GTCO also saw a 31.9 percent rise in income tax expenses, which cut into their profit after tax. It dropped to N614.6 billion from N699.6 billion.

Last July, the banking group finished the secondary listing of its shares on the main market of the London Stock Exchange. This replaced years of trading through global depositary receipts. These receipts let investors hold shares in a foreign company and trade them on their own country’s stock exchanges.

The stock has increased by 37.9 percent so far this year.