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GTCO Has The Strongest Net Margin Among Peers

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Guaranty Trust Holdings (GTCO) Plc has generated more net income as a percentage of revenue more than peer rivals, which indicates the lender is efficient even as it operates in a punitive regulatory environment.

Data gathered by MoneyCentral shows Guaranty Trust Holdings or GTCO has a net profit margin of 40.62 percent as at September 2021 as it was able to use automation and latest technology to contain operating expenses amid inflationary pressure, currency devaluation, and huge energy costs.

That compares with Zenith Bank’s net profit margin of 30.96 percent; Access Bank, 17.58 percent; Fidelity Bank, 15.20 percent; First City Monument Bank, 9.23 percent; Stanbic IBTC Holdings, 27.24 percent; United Bank for Africa, 21.33 percent, and Sterling Bank, 8.67  percent.

Net profit margin is typically expressed as a percentage but can also be represented in decimal form. The net profit margin illustrates how much of each dollar in revenue collected by a company translates into profit.

It helps investors assess if a company’s management is generating enough profit from its sales and whether operating costs and overhead costs are being contained.

GTCO asset quality remains solid, which validates management’s excellent risk management strategy and efficient portfolio allocation across the sectors, while the gradual economic reopening paved the way for valued customers to pay up interest on money borrowed that saw impairment on financial asset shrink.

Basically, last year was tough for sector players who grappled with low yields caused by the dovish stance of the central bank that undermined net interest margin and squeezed revenue, leaving the return on equity depressed.

 The combined net income of the largest and most liquid lender was flat at N660 billion as at September 2021, according to data gathered by MoneyCentral.

That compares with 4.07 percent increase at the bottom line to N658.29 billion in 2020; the slow growth in this period is due to the coronavirus induced loan loss expense as a lockdown imposed by the government to curb the spread of the virus hindered customers from meeting their financial obligations.

Combined net income was up 11.39 percent to N632.49 billion as at September 2019, while profit rose 14.97 percent to N567.78 billion in 2018 financial year.

Cumulative net income grew by 17.84 percent and  20.10 to N493.84 billion and N419 billion in the 2017 and 2016 financial years, and it will be recalled that the rebound in crude oil price and the introduction of the Investors’ and Exporters’ Window in 2017 eased the flow of foreign currency in the system as the country exited its first recession in 25 years.

McKinsey and Company in a recent projected banking revenue to return to pre-crisis level between 2022 and 2024, depending on whether a rapid or slow recovery prevails, which means the industry faces a prolonged period of uncertainty.

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