GTBank Q1 2019 Report: Satisfactory Start to a Challenging Year

April 18, 2019/InvestmentOne report 

  • Net interest income of N58.2billion, up 12.4% q/q; down 2.5% y/y
  • Non-interest income of N35.3billion, up 23.3% q/q, up 28.5% y/y
  • Profit before tax of N57.0billion, up 9.6% q/q; up 8.3% y/y
  • Profit after tax of N49.3billion, up 14.5% q/q; up 10.4 y/y 

GT Bank released its Q1 2019 to the NSE yesterday, where it reported a 12.4% q/q (-2.5% y/y) rise in net interest income to N58.2billion. However, unlike Zenith, it reported a 23.3% q/q (28.5% y/y) rise in non-interest income. Similar to Access and Zenith, it also reported a drop in impairment charges (79.1% q/q & 60.3% y/y) to N651million. Consequently, PBT and PAT rose 9.6% and 14.5% q/q to c.N57.0billion and N49.3billion respectively. 

Similar to Zenith Bank, GT’s net loans were somewhat flat q/q but down 5.0% y/y. This, combined with the lower interest rate environment in Q1 2019 relative to Q1 2018, seemed to have weighed in on interest income which was down 7.8% y/y. Net Interest Margin (NIM) was down 19bps y/y to 9.9%.  

The bank also reaped the benefits of a growing customer base (up 6.0% q/q), as fee and commission income rose 54.0% q/q and 22.0% y/y. This, combined with some recoveries of c.N6.1billion contributed to the 23.3% q/q and 28.5% y/y growth in non-interest income.  

Impairment charges dropped 79.1% q/q hence, Cost of Risk declined to 0.05% from 0.34% in FY 2018. NPL ratio moderated 27bps q/q to 7.03%.  

In conclusion, GTB continues to dominate its peers, with ROE of 32.8% and CAR of 22.3%. The bank’s Cost-to-income ratio inched up slightly to 38,6% but still compare favorably to Zenith’s and Access’ of 50.0% and 53.2% respectively. 

GUARANTY TRUST BANK PLC Q1 2019 (YE: DEC) (N millions)

Q1 2019

Q/Q

Y/Y

Interest Income

74,484

7.3%

-7.8%

Interest Expense

-16,267

-7.7%

-22.8%

Net Interest Income

58,217

12.4%

-2.5%

Non-interest income

35,297

23.3%

28.5%

Profit before provisions

93,514

16.3%

7.3%

Loan Impairment charges

-651

-79.1%

-60.3%

Total Opex

-35,878

41.8%

9.1%

PBT

56,985

9.6%

8.3%

Tax

-7,682

-13.9%

-3.4%

Tax rate

13.5%

-369bps

-163bps

PAT

49,303

14.5%

10.4%

Source: Company financials, Investment One Financial Services Research

Q1 2019 BANKS COMPARISON SHEET

 

NGN billion (unless stated otherwise)

 

ACCESS

ZENITH

GT BANK

Key Income Statement Figures

Gross Earnings

160.1

158.1

110.3

Net Interest Income

56.8

86.1

58.2

Non-interest Income

46.8

32.7

35.8

Total Expenses

-55.1

-59.4

-35.9

Loan Impairment Charges

-3.4

-2.1

-0.7

Profit Before Tax

45.1

57.3

57.0

Y/Y PBT Growth

 

64.4%

6.1%

8.0%

Dividend (Kobo per share)

nil

nil

nil

EPS (kobo per share)

139

160

174

Key Balance Sheet Figures

Total Assets

6,427

5,877

3,556

Total Liabilities

5,851

5,098

2,929

Total Equity

576

779

627

Key Ratios

Net Interest Margin

5.6%

8.9%

9.9%

Cost of Fund

4.4%

3.0%

nil

Cost to Income

53.2%

50.9%

38.6%

NPL ratio

10.2%

4.9%

7.0%

Liquidity (bank level)

47.6%

66.7%

47.7%

Cost of Risk

0.5%

0.4%

0.1%

Capital adequacy ratio (bank level)

19.1%

25.0%

22.3%

ROE

30.9%

25.2%

32.8%

ROA

2.9%

3.4%

5.8%

Source: Company financials, Investment One Financial Services Research

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