Guaranty Trust Holding Company Plc (GTCO) has published its audited half-year results for the period ended June 30, 2025, posting a pre-tax profit of N601 billion, down significantly from the N1 trillion recorded in H1 2024.
Profit after tax came in at N449.01 billion, less than half of the N905.57 billion earned in the corresponding period last year.
The Board nevertheless approved an interim dividend of N1.00 per share, unchanged from H1 2024. Payment will go to shareholders on record as of October 7, 2025.
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Earnings Profile: Shift Toward Securities
GTCO’s gross earnings remained above N1 trillion despite the fall in profits, recording N1.073 trillion in H1 2025. The main driver was interest income, which jumped 71% year-on-year to N812.36 billion, expanding its share of gross earnings to 76%, compared with 44% in H1 2024.
Within that, interest income from securities surged 44% to N375 billion, overtaking income from loans and advances, which grew 22% to N299.63 billion. Securities now account for 35% of gross earnings, compared with 27% from loans, a striking shift for a group historically seen as a loan-driven institution.
Geographically, N256 billion of interest income was earned outside Nigeria, highlighting the growing relevance of GTCO’s international operations to its overall performance.
Cost Structure and Margins
Interest expenses rose sharply by 43% year-on-year to N154 billion, largely from customer deposits, which accounted for N147 billion. Yet costs amounted to just 18% of total interest income, preserving a strong spread. This helped push net interest income to N632.24 billion, up nearly 29% from last year.
Impairment charges climbed to N54.97 billion from N47.41 billion a year earlier. The bulk came from Stage 2 loans (N58.89 billion), suggesting increased caution over credits showing early signs of stress. A modest N4.27 billion write-back on Stage 3 loans softened the impact. After provisions, net interest income rose nearly 30% to N577.67 billion, evidence of resilient risk-adjusted performance.
Non-Interest Income
GTCO generated N151.46 billion in fee and commission income, up 33% year-on-year, though with uneven contributions:
- Electronic banking income fell to N28.61 billion (down 12%).
- Commission on touch points surged 617% to N24.78 billion.
- Account maintenance fees climbed 12% to N17.58 billion.
This indicates that while digital channel fees came under pressure, traditional and point-of-service banking delivered a meaningful uplift.
Balance Sheet Strength
Customer deposits grew 19% to N11.878 trillion, accounting for 71% of total assets, which expanded 13% to N16.692 trillion. Loans and advances to customers increased 21% to N3.358 trillion, showing the bank is still expanding credit selectively. Cash and cash equivalents stood at N4.786 trillion, broadly stable.
GTCO shares have gained 63.2% year-to-date, closing at N90 per share on September 23, 2025. Investors appear focused on the group’s strong margins, balance sheet expansion, and steady dividend, rather than the sharp year-on-year earnings decline.
Analyst Outlook: What the Numbers Mean
GTCO’s results reveal a strategic pivot. The heavier reliance on securities income indicates the group may be prioritizing capital preservation and predictable yields over aggressive loan expansion amid economic uncertainties. Securities, often less risky than lending, have cushioned profitability in a challenging credit environment.
The shift, however, raises two questions. First, can GTCO maintain loan book growth at 20.5% without allowing impairment charges to escalate? The increase in Stage 2 provisions suggests early caution signs, though overall credit quality remains contained. Second, can the bank continue to generate above-market spreads when interest costs are rising at over 40% year-on-year?
On the positive side, GTCO’s N1.00 interim dividend underscores confidence in its capital buffers and future cash flow, despite lower profits. This could be interpreted as a bid to reassure investors during an earnings downcycle.
Comparatively, the group remains one of the best-capitalized banks in Nigeria, with its N90 per share valuation supported by robust asset growth and fee-based income expansion. Against peers like Zenith and Access, GTCO’s strategy of tilting toward securities and international operations could reduce earnings volatility, though at the cost of lower headline profits compared to the extraordinary H1 2024.
However, GTCO’s H1 2025 results paint a picture of a bank adapting to tighter economic and credit conditions. Profitability may have fallen by more than half, but the underlying performance — strong net interest income, disciplined cost management, stable impairments, and double-digit balance sheet growth — suggests the group remains resilient.
For investors, the key watchpoints over the next six months will be whether GTCO can sustain loan growth without asset quality deterioration, manage rising funding costs, and continue balancing securities income with core lending. If it succeeds, the stock’s strong rally could find further support, even as the broader sector grapples with macroeconomic headwinds.