THE Guaranty Trust Bank Plc on Wednesday, October 19, reported a jump of 59 percent in profit after tax, PAT, to N119.9 billion, following a major boost from foreign exchange revaluation gains. The unaudited results made available to market operators by the Nigerian Stock Exchange, NSE, showed gross earnings of N329.284 billion, up by 43.5 percent compared with N229.4 billion in the corresponding period of 2015.
Net interest income rose by 10.5 percent from N120.13 billion to N132.7 billion, while net fees and commission income grew by 28.2 billion to N37.5 billion, up from N48.13 billion.
However, net impairment loss on financial assets soared by 570 per cent to N57 billion, from N8.5 billion in 2015. Other income, from foreign exchange revaluation gains, jumped up from N6.957 billion to N93.95 billion.
The profit before tax, PBT, improved to N141 billion, up from N92.1 billion, while PAT rose by 59.6 percent to N119.92 billion, compared from N75.2 billion in 2015. Assessing the result for the third quarter, analysts at FBN Quest said the performance showed strong PAT of N46 billion, up 97 percent, off the back of a PBT result of N49 billion, up 71 percent.
The FBN Quest said: “PAT growth was stronger due to other comprehensive income of N4.3 billion, which was up 172 percent. Other comprehensive income was boosted by FX translation gains. The market had been expecting tangible foreign exchange gains in GTBank’s results in recent weeks.
Similar to second quarter, although the foreign exchange revaluation gain will be welcomed by the market, the scale of the provisions, though down quarter/quarter, will likely concern investors.
Nonetheless, the underlying numbers were quite strong enough to provide an offset, with both funding income and non-interest income up, by 34 percent and 184 percent to N53.6 billion and N46.3 billion, respectively.
According to the analysts, third quarter PBT beat by 18 percent on the back of positive surprises on both income lines while PAT was ahead by 22 percent. “Funding income and non-interest income were both ahead by 29 percent and 53 percent respectively to more than offset negatives on both the operation expenses and provision lines. Provisions negatively surprised by around 230 percent. On an annualised basis, GTBank’s nine months 2016 PBT tracks ahead of both full year consensus estimate of N151 billion and management guidance of N125 billion.”
— Oct 31, 2016 @ 01:00 GMT