Guaranty Trust Holding Company Plc (GTCO Plc) has posted a record-breaking pre-tax profit of N1.266 trillion for its 2024 full-year audited results, more than doubling the N609.3 billion reported in 2023. This represents the highest profit ever recorded in the bank’s history and highlights the remarkable earnings momentum seen across Nigeria’s banking sector despite economic turbulence.
The bank also recorded gross earnings of N2.148 trillion, an 81% increase from the N1.186 trillion posted in 2023, demonstrating strong revenue growth across interest and non-interest income segments. Profit after tax surged by 88.4% to N1.017 trillion, underscoring GTCO’s ability to adapt to macroeconomic shifts and leverage high-yield assets.
As part of its earnings announcement, GTCO declared a final dividend of N7.03 per share, payable on April 24, 2025. This brings the total dividend for the 2024 financial year to N8.03 per share, marking a 151% increase in payout, reinforcing the bank’s commitment to delivering value to shareholders.
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Nigerian Banks Flourishing Amid Economic Challenges
Despite Nigeria’s economic headwinds, 2024 has been a remarkable year for the banking sector. The country has faced rising inflation, foreign exchange instability, high interest rates, and weakened consumer spending power. However, Nigerian banks have thrived under these conditions, taking advantage of higher yields on fixed-income securities, increased interest income, and a growing deposit base.
The devaluation of the naira, while straining import-dependent businesses, has boosted banks with strong foreign currency positions. Many banks, including GTCO, reported huge revaluation gains on foreign currency assets, contributing significantly to profitability.
The Central Bank of Nigeria’s (CBN) tight monetary policies, which have kept interest rates high, have also worked in favor of banks. The elevated rates have enabled banks to earn more on loans and fixed-income investments, driving record revenue across the sector.
GTCO’s 2024 results are a testament to these trends, as the bank strategically shifted its focus towards investment securities, significantly increasing its holdings in high-yield instruments.
Interest Income and Deposit Growth Drive Performance
A breakdown of GTCO’s earnings structure shows that interest income remained the primary revenue driver, accounting for over 62% of total gross earnings. The bank recorded N1.342 trillion in interest income, representing a 143.6% year-on-year growth.
However, there was a notable shift in how the bank generated interest income. Traditionally, GTCO’s loan book was the biggest contributor to interest income. While interest income from loans and advances grew by 73% YoY, its share of total interest income dropped from 54.88% in 2023 to 38.91% in 2024.
Instead, GTCO pivoted aggressively into investment securities, with interest income from securities at amortized cost, fair value through profit or loss (FVTPL), and fair value through other comprehensive income (FVOCI) soaring by 230.15% to N582.856 billion, now making up 43.44% of total interest income.
This strategic shift reflects GTCO’s response to Nigeria’s high-interest rate environment, where government securities and other fixed-income investments delivered far higher yields than traditional loans.
Rising Deposits and Interest Expenses
GTCO’s deposit base grew significantly, increasing 44.78% YoY to N10.013 trillion. This N2.6 trillion growth denotes an increase in depositors even amid economic challenges.
However, the cost of maintaining these deposits also increased sharply. Interest expenses surged 148.31% YoY to N283.215 billion, with customer deposits accounting for 78% of this (N220.46 billion), marking a 115% rise from the previous year.
This suggests that GTCO had to offer higher interest rates to attract and retain customer deposits, reflecting the broader industry trend of banks competing aggressively for funding.
Despite this, GTCO’s net interest income still grew impressively by 142.41% to N1.059 trillion, indicating that the bank’s earnings from assets (particularly investment securities) outpaced the increased cost of deposits.
Non-interest income and Foreign Exchange Gains
GTCO’s non-interest income also experienced strong growth, led by fees, commissions, and revaluation gains.
The bank generated:
- N56 billion from electronic banking fees
- N32 billion from account maintenance charges
- N34.8 billion from commissions on foreign exchange transactions
Although business growth recorded significant volumes, fees and commission expenses were contained at N31.5 billion, reflecting effective cost management.
One of the biggest contributors to GTCO’s bottom line was other income, particularly unrealized fair value gains on financial instruments, which totaled N517.5 billion, up from N367.3 billion in 2023.
This massive jump was driven by the revaluation of foreign currency assets, denoting the impact of naira devaluation and the resulting gains on foreign-denominated instruments.
Strong Balance Sheet and Shareholder Value Creation
GTCO’s total assets expanded by 52.67% YoY to N14.796 trillion, reflecting the bank’s robust growth trajectory. Loans and advances also rose to N2.786 trillion, a 12.32% increase, while shareholders’ funds climbed by 83.6% to N2.712 trillion.
The bank’s retained earnings more than doubled, reaching N1.320 trillion, a 127.55% increase YoY. Share capital and premium also saw a significant rise of 150.6% to N346.3 billion, reinforcing strong capital adequacy and shareholder value creation.
How the economy is structured determines where the money is and which sectors or industries will be favoured. Financial services sector will make plenty money in the current sector, because holders of cash don’t really need to take any risk to make money. Securities are paying handsomely, so it makes no sense putting money on struggling sectors. Whether economy is good or bad, making money is constant, depending on your positioning.
For manufacturers to smile, you will need to flip both the monetary and energy policies. Each regime creates billionaires in sectors it wants, and it’s obvious where the current regime favours. Anything you want from the economy, you will have to tune it to respond to that. You cannot be wishing one thing and doing another.
Those who have shares in banks will make money too, the banks are paying dividends. Either way, for the economy to favour you, you have to be participating. Nothing favours a poor man who has no money to put anywhere, good or bad economy, it’s the same for him.