Segun Agbaje-led Guaranty Trust Holding reports 15.8-percent decline in mid-year profit

Nigeria-based multinational financial services group Guaranty Trust Holding Company (GTCo) has declared a 15.8-percent decline in profit for the first six months of its 2021 fiscal year, which ended on June 30.

Figures contained in the lender’s latest filings revealed that its profit for the period fell to N79.4 billion ($194.0 million) in the half-year period ending June 30, from N94.3 billion ($229.3 million) in the same period of last year.

The holding’s half-year profit was pressured downward by difficulties in its operating environment, coupled with a low-interest-rate climate that impacted its interest income and financial performance in the first half of 2021.

GTCo is a Lagos-based financial services holding that offers retail and investment banking, pension management, asset management and payments services.

The group was created in July following the reorganization of Guaranty Trust Bank Plc into a holding company, which will push the reorganized entity to invest in key businesses beyond banking.

This was done under the leadership of Managing Director Segun Agbaje, a renowned executive who also sits on the board of the leading beverage group, PepsiCo.

Guaranty is the largest financial services provider in Nigeria in terms of market capitalization. It is also the fifth largest Nigerian bank in terms of asset value.

The double-digit reduction in profit in the first half of 2021 was driven by a 22.3-percent decline in interest income from N150.5 billion ($365.9 million) last year to N116.9 billion ($284.2 million).

Its gross earnings for the period also fell from N225.1 billion ($547.3 million) last year t0 N207.9 billion ($505.5 million). This is substantially lower than Access Bank’s and Zenith Bank’s gross earnings in the first half of their current financial year.

This lackluster performance was further supported by an increase in the group’s operating expenses, which pressured profit to fall below the 80-billion-naira ($194.3 million) mark.

However, the company’s total assets value improved from N4.9 trillion ($11.9 billion) in December 2020 to N5.0 trillion ($12.6 billion) in June 2021, on the back of growth in its investment securities. More so,  its liabilities increased moderately from N4.1 trillion ($10.0 trillion) to N4.2 trillion ($10.2 trillion) due to the increase in deposits from banks and its customers.

As of press time 5:55 AM, September 10 shares in the group were worth N27.05 ($0.066) per share, 2.9-percent lower than its opening price on Monday, September 6.

At this price valuation, the group’s market capitalization is put at N797.6 billion ($1.9 billion), making it the largest, in terms of market capitalization among its peers.

The board has proposed an interim dividend of N0.30 ($0.000729) per share on all its shares, this translates to a payment of N8.8 billion ($21.4 million).