GTB’s first-quarter profit drops N4.5 billion as interest income wanes

Nigeria’s biggest lender by market value saw its first quarter profit thin by about a tenth or N4.520 billion, as revenue from interest came under pressure and provision for potential credit loss linked to the coronavirus outbreak ate away at earnings.

Guaranty Trust Bank (GTB) noted in its earnings report for the first quarter of 2021 issued Wednesday that net interest income stood at N52.434 billion, 18.4 per cent weaker than the figure for the same period of last year, reflecting the urgency to stabilise earnings from other sources.

It hopes to secure a payment service licence to kick-start a fintech unit any moment from now, and also part of the way to go is its ambition to acquire a bank in Kenya, East Africa’s largest economy.

Transitioning to a holding company this year is crucial to Segun Agbaje-led GTB’s game plan for weathering stormy days just as setting up insurance, pensions and asset management divisions are parts of the mix.

As regulation demands, GTB put aside N1.86 billion to cover expected loan defaults and credit assets liable to become toxic. It compares with the N1.223 billion committed to that purpose between January and March 2019.

Moody’s, another rating agency, gave a similar projection last month.

GTB’s pre-tax profit came to N53.683 billion down from N58.204 billion. Profit for the quarter was N45.546 billion, declining by nearly 10 per cent.

The lender highlighted a jump of 26.8 per cent in account maintenance charges and more than a half in E-business Income as the drivers of an improvement in fee and commission income from N14.463 billion to N17.574 billion.

Shares in GTB closed in Lagos on Wednesday at N30 per unit, up by 4.17 per cent.