GTBank To Pay Shareholders N79.43bn Dividend As Financial Assets Underpins Earnings

Guaranty Trust Bank Plc, the largest lender by market capitalization in Africa’s largest economy will pay its shareholders N79.43 billion in dividend for 2020 financial year as income from financial securities underpinned earnings.

The lender has proposed a final dividend of N2.70 per ordinary share of N0.50, with an interim dividend of N0.30, bringing the total dividend in 2020 to N3, according to a statement on the Nigerian Stock Exchange (NSE).

Despite a punitive regulatory environment and slow economic recovery, GTBanK’s net income increased by 2.33 percent to N201.43 billion in December 2020 from N196.84 billion the previous year.

The growth at the bottom line (profit) was largely driven by a 231.97 percent surge in foreign exchange revaluation gains to N56.63 billion as at December 2020 and upsurge of 155.4 percent in income from financial asset to N12.45 billion that helped compensate for a reduction in interest income and spiraling loan loss expense on financial asset.

As a result of huge write offs related to the coronavirus pandemic headwinds that paralyzed economic activities as government imposed a lockdown to curb the spread of the virus, impairment on financial asset surged by 110.10 percent to N6.24 billion in the period under review from percent to N2.97 billion the previous year.

There has been a drop in interest income of Nigeria banks due to the dovish stance of the central bank that led to precipitous crash in net treasury bills to an unprecedented level.

To further exacerbate the anemic situation of lenders is the decision of the Apec bank to hike the minimum loans to deposit ratio while it hiked the interest rate with a view to protecting the economy from the devastating effect of Covid-19.