Early this week (Monday), foremost African banking group, Guaranty Trust Bank plc released its audited financial results for the year ended December 31, 2015 to the Nigerian and London Stock Exchanges.
The 2015 results show positive performance across all financial indices, reaffirming GTBank’s position as one of the most profitable and well managed financial institutions in Nigeria.
The Group delivered an impressive Profit Before Tax of N120.7billion, an increase of N4.3billion or 3.7percent over the N116.4billion reported in December 2014 and Gross Earnings of N301.9billion an increase of 8.4percent from the N278.5billion recorded in the same period of 2014. In terms of value creation for its shareholders, the Bank recorded pre-tax ROAE of 31percent and ROAA of 5percent respectively.
At the Nigerian bourse, stock buyers have already started pricing in GTBank’s impressive Full Year results evidenced in the upward movement of its share price. As at Tuesday, GTBank market capitalisation stood at N488.851billion and shares outstanding of 29,431,179,224 units. The bank’s share price recorded a 52-week high of N31.88 and 52-week low of N13.16.
The Bank’s balance sheet remained strong with 7.2% growth in Total Assets, from N2.36trillion in 2014 to N2.52trillion in the year under review. Loans to customers grew by 7.5percent to close at N1.37trillion from N1.28trillion in 2014. Despite the implementation of the Treasury Single Account (TSA) by the FGN, customer deposits remained relatively stable with a marginal year-on-year decline of 0.49% from N1.62trillion in 2014 to N1.61trillion in 2015.
The Bank continued to maintain a disciplined and prudent approach to loan growth in line with its Risk Management framework. The Bank’s Non-Performing Loans (NPL) ratio remained low at 3.21%; up slightly from 3.15% in the comparative period of 2014. Against this back drop of strong financial showing, the GTBank is proposing Total-Year Dividend of N1.77k per share (inclusive of the 25kobo interim dividend paid at half year 2015).
Segun Agbaje, Managing Director/CEO of Guaranty Trust Bank plc while commenting on the financial results said that the Bank’s financial performance in 2015 is an indication that we have earned the loyalty of our customers and an attestation of the hard work and dedication of our staff, management and Board. The Group has delivered a respectable Profit Before Tax (PBT) of N120.7billion despite an extremely challenging business environment in 2015.
He further stated that “As a Bank, we will continue to actively partner with our customers and grow our business in a sustainable manner that is not only driven by profit objective, but with an increased focus on empowering our customers with a view to growing Nigerian economy. Also, we remain committed to maximising shareholders’ value and delivering superior and sustainable returns whilst actively expanding our franchise in select, high growth African markets where we believe we have a competitive advantage.
The Bank has continued to report the finest financial ratios for a Financial Institution in the industry with a return on equity (ROE) of 31percent and a cost to income ratio of 44.4percent evidencing the efficient management of the banks’ assets.
“GTBank kicked-off earnings season with the release of a decent set of results”, said Adesoji Solanke, head of research (Nigeria) and SSA banks lead analyst at Renaissance Capital.
Also reacting to GTBank plc results, Olubunmi Asaolu-led team of research analysts at FBNQuest said, “These results are broadly in line with our expectations, and crucially, management’s guidance. Although the market will be relieved that the results did not disappoint (especially given the profit warnings from three banks in the last two months), we expect that attention will shift very quickly to management’s comments on its 2016 outlook.”
“Coming into 2016 one of the key concerns the market had was refinancing risks relating to GT Bank’s Eurobond due May 2015. We believe those concerns have now dissipated given the strong signal GTBank sent to the market with its early redemption offer. We continue to believe that GTBank is better placed than most of the banks in our coverage universe to weather the storm ahead. We rate GT Bank shares Outperform,” FBNQuest analysts added.
Also, Olalekan Olabode-led team of equity analysts at Vetiva Capital Management Limited said GTBank posted impressive performances across key line items. “Amidst the tough operating environment, GTBank earnings were largely ahead of consensus estimate; earning per share (EPS) was 6percent ahead of our N3.20 and N3.37 consensus estimate”
With GTBank’s impressive results, Vetiva analysts have updated their model and revised their forecast accordingly. “Whilst we are impressed by the decent earnings growth, we expect GTBank impressive efficiency to continue to support earnings and forecast,” Vetiva analysts added saying that overall, they have revised their forecast trading price for GTBank shares to N30.07 against earlier N28.
In due recognition of the Bank’s leading role in Africa’s banking industry, owing to its bias for world class corporate governance standards and excellent service delivery and innovation, GTBank has been a recipient to numerous awards over the course of the year. They include Best Bank in Nigeria by Euromoney, 2015 Bank of the Year by African Investor and Best Banking Group Nigeria by World Finance.
Iheanyi Nwachukwu
