Guaranty Trust Holding Company Plc (GTCO) reported a sharp decline in profitability for the third quarter of 2025, as rising operating costs and fair value losses weighed heavily on performance.
According to its unaudited financial statement released on the Nigerian Exchange (NGX), profit after tax fell by 35.5% year-on-year to ₦699.64 billion, compared to ₦1.085 trillion recorded in the same period of 2024.
Earnings per share (EPS) also dropped by 46.1% to ₦20.71, down from ₦38.41 a year earlier. The financial holding company attributed the weaker results to cost pressures and a contraction in non-interest income, which offset the gains made from interest income.
Pre-tax profit slid by 26.1% year-on-year to ₦900.81 billion, as operating challenges persisted across the banking sector. Analysts say higher funding costs, increased personnel expenses, and fair value losses have eroded the group’s earnings momentum.
The report also showed a 49.6% surge in effective taxation, further squeezing bottom-line profits.
Interest Income Shows Resilience
Despite the decline in profit, GTCO recorded an improvement in interest income, which rose 25.6% year-on-year to ₦1.23 trillion. The growth was driven by higher income from investment securities, loans to customers, and cash and bank balances.
-
Income from investment securities jumped 39.9%.
-
Loans to customers increased 14.9%.
-
Cash and bank balances grew 15.1% compared to the previous year.
However, interest expenses spiked 40.2% year-on-year to ₦278.73 billion, reflecting elevated funding costs from customer deposits, borrowings, and institutional financing. Specifically, customer funding costs climbed 41.5%, while borrowing costs rose 43.3%.
Even with these pressures, net interest income still managed to grow 21.8% year-on-year to ₦952.14 billion, thanks to effective asset repricing strategies.
Non-Interest Income and Operating Costs Weigh Heavily
GTCO’s non-interest income fell sharply by 56.5% to ₦346.28 billion in the first nine months of 2025, compared to ₦796.74 billion in the corresponding period of 2024. This decline was compounded by a ₦49.17 billion fair value loss, in contrast to a ₦523.22 billion gain posted the previous year.
Consequently, operating income dropped 18.9% year-on-year to ₦1.23 trillion.
Operating expenses continued to rise, climbing 11.3% to ₦327.83 billion, driven by:
-
Personnel costs (+28.1%),
-
AMCON levy (+38.7%), and
-
Depreciation expenses.
As a result, GTCO’s cost-to-income ratio deteriorated to 21.0%, up from 15.3% a year earlier, signaling tighter margins and sustained cost challenges.
Industry watchers say the group’s outlook for the final quarter of 2025 will depend on how effectively it manages funding costs and stabilizes non-interest income streams amid macroeconomic uncertainties.
