…as overseas profit grows by 33% to N18bn
Guaranty Trust Bank (GTB) Plc generated N53.95 billion as revenue from its eight foreign subsidiaries in the first nine months of this year, representing an increase of 25 percent over N43.3 billion that those foreign centres made in similar period in 2018. This is part of the insights gained from the analysis of its third quarter unaudited results for the period ended September 30, 2019, released to the Nigerian Stock Exchange (NSE) last week.
GTB has subsidiaries in Ghana, Sierra Leone, Liberia, The Gambia, Cote d’Iviore, Kenya and Tanzania. Outside the African continent, it maintains a subsidiary in the United Kingdom. While the combined overseas gross income grew by 25 percent, the tier-one Nigerian lender posted 239 percent, 45 percent and 41 percent growth rates in gross incomes from Tanzania, Ghana and Cote d’Ivoire respectively. Revenue from Tanzania grew from N71.66 million last year September to N242.62 million as at the end of the third quarter of 2019, an increase of 239 percent over corresponding revenue made in similar period in 2018.
The bank’s subsidiary in Ghana increased its revenue by 45 percent from N16.72 billion in September 2018 to N24.25 billion same period this year. Gross income from Cote d’Ivoire’s operations grew by 41 percent from N1.53 billion last year September to N2.16 billion by September 2019. In Kenya, another East African, gross income increased by 21 percent from N7.76 billion to N9.39 billion during the period. In the Gambia, revenue increased by 19 percent from N2.72 billion to N3.24 billion during the period.
Revenue also increased by 9 percent in Sierra Leone but declined by 13 percent in Liberia. Outside the African continent, revenue growth in the UK was at 5 percent from N4.55 billion to N4.79 billion during the reference period.
Operating expenses in all the foreign subsidiaries managed to grow by 7 percent from N24 billion to N25.6 billion during the reference period. Operating expenses actually declined in Kenya by 6 percent and 1 percent in Liberia which was in total contrast to the general trend. By implication, it means that in the nine months ended September 30, 2019, when assessed by cost to revenue ratio, it cost GTB 48 kobo to generate 100 kobo revenue from its overseas operations this year compared with 55 kobo to generate 100 kobo in September 2018.
Cost to revenue ratio was not favourable in the United Kingdom and Liberia during the period, whereas the ratio declined in other regions. Cost to revenue worsened in the United Kingdom as it rose from 78 kobo to a naira in 2018 to 86 kobo to a naira in September 2019. In Liberia, the ratio rose from 50 kobo to 57 kobo.
The ratio fell in Ghana to 28 kobo as against 35 kobo; 58 kobo as against 68 kobo in The Gambia; 63 kobo to 76 kobo in Cote d’Ivoire; 65 kobo to 83 kobo in Kenya and to N2.74 in Tanzania compared with N7.41 in corresponding period in 2018.
The combined profit after tax (PAT) realised in the eight countries rose by 33 percent from N13.83 billion last year September to N18.44 billion in September 2019. The highest growth in profitability was in Kenya where PAT jumped by 148 percent from N822.4 million to N2.04 billion. Cote d’Ivoire operations produced 70 percent growth in PAT which moved from N387.8 million to N657.9 million during the reference period.
Profitability rose by 42 percent in the Gambia where the bank’s subsidiary in that country made N889.09 million PAT as at September 2019 compared with N628.09 million in Q3 2018. The same trend was observed in Ghana where the bank made N11.67 billion as PAT in Q3 2019 as against N8.37 billion in Q3 2018. In the first nine months of this year, GTB’s operations in Ghana accounted for 63 percent of its overseas PAT and that was slightly higher than 61 percent as at September 2018.
Notwithstanding, GTB’s Tanzania subsidiary ended up recording a loss after tax during the period. It made a loss after tax of N425.5 million by September 2019 and that compares with a loss after tax of N461.3 million in September 2018. This is the only subsidiary where the bank made a loss after tax during the period under review.
