GTB Rakes in N3.29bn from Account Maintenance Charges in Q1 2020

Guaranty Trust Bank (NSE TICKER: GUARANTY) earlier today released its condensed unaudited group financial statement for the period ended 31st March 2020 to the Nigerian Stock Exchange and the Investing Public. The bank reported a total earnings of N112.86bn (Q1 2019: N110.32bn) from a combination of Interest incomes, fee and commission income, Net gains on financial instruments and other income.

While the fees and commission income decreased by 22%, as a result of drop in it’s components like credit related fees and commissions (dropped by 38.81%) and E-business Income (dropped by 21.52%), the income from Account Maintenance Charges increased by 8.15%.

The bank was able to grow all forms of Deposits from customers in the period in review; Term deposits (Q1 2020: N425.16mn Q1 2019: N382.37mn), Current deposits (Q1 2020: N1.58bn Q1 2019: N1.47bn), Savings (Q1 2020: N754.70mn Q1 2019: N676.35mn) combining to give a 9.30% growth.

The bank maintained a Profit after Tax Margin of 45.03% (Q1 2019: 45.33%) to post a Profit after Tax of N50.06bn, a growth of only 1.55% over the N49.30bn reported in the same period in 2019. It’s Earnings per Share stood at N1.77, marginally higher than the N1.74 reported in 2019.

Some key ratios extracted from the report include; a Return on Equity (Post Tax) of 29.70%, Return on Asset (Post Tax) of 5.12%, Liquidity ratio of 45.59%, NPL/Total Loans ratio of 5.95%, Capital adequacy ratio (Full IFRS 9 Impact) of 23.52% and a Net Loans-to-Deposits Ration of 56.67%.

Guaranty Trust Bank Plc (“the Bank” or “the Parent”) is a company incorporated in Nigeria. The address of the Bank’s registered office is Plot 635, Akin Adesola Street, Victoria Island Lagos. The Parent and the Group are primarily involved in investment, corporate, commercial and retail banking.

About the impact of Covid-19 on their operations, the bank said in the report “The Group will continue to closely monitor the status of the fight against the pandemic and its impact on the Groups’ business. However, based on current assessment, the Directors are confident that the Going Concern of the Group will not be threatened and would be able to continue to operate Post COVID-19 i.e. foreseeable future.

GUARANTY has a total of 29,431,179,224 outstanding shares and a market capitalization of NGN547.41bn; it is one of the most capitalized companies listed on the Stock Exchange.

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When you want to talk about the best stocks on the exchange, GUARANTY will make the shortlist of any Analyst that watches the Nigerian Stock Exchange. It is a BUY in our books for many reasons; financially stable, top notch management, operational efficiency, high and consistent dividend history, high liquidity stock etc.

At the end of today’s trading session, GUARANTY share price was N18.60, 37.37% down YTD, 57.44% down over 2 years, and 35.30% down over 5 years. Our Analysis of its 2019 full year financial report for the period ended 31^st December, puts the fair value price for the stock between N17.40 – N26.10. The stock is already selling below the minimum range of this valuation.

Written by:

Basil Maduakor

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