GTCO Surpasses Other Tier-1 Banks as Most Profitable Lender by ROE

Kayode Tokede

Despite decline in profitability, Guaranty Trust Holding Plc (GTCO) has surpassed other Tier-1 banks to maintain its position as the most profitable lender by Return on Equity (ROE).

ROE is a ratio that provides investors with insight into how efficiently a company (or more specifically, its management team) is handling the money that shareholders have contributed to it.

In other words, the ratio measures the profitability of a corporation in relation to shareholder funds.

With 20.60 per cent ROE in 2021 from 26.83 per cent in 2020, GTCO performance has shown efficient management in generating income and growth from its shareholders amid a punitive regulatory environment.

The decline in ROE can be attributable to the lender’s 13 per cent drop in profit after tax to N174.84billion in 2021 from N201.44billion in 2020

The Group Chief Executive Officer, GTCO, Mr. Segun Agbaje in a statement had said: “Our performance reflects the strength of our franchise and underscores our ability to deliver long-term value for our Stakeholders in spite of the challenges in the business environment and shifting economic conditions.

“As a Group, we have continued to explore newer ways to connect with our customers and better our communities by offering greater and more rewarding experiences.”

That compares with Zenith Bank’ ROE that closed 2021 at 20.40per cent from 22.4 per cent reported in 2020; Access Holdings Plc with 17.8 per cent ROE in 2021 from 15.6 per cent in 2020; United Bank for Africa with 15.6 per cent ROE in 2021 from 17.2 per cent in 2020.

In addition, FBN Holdings reported ROE of 18.44 per cent in 2021 from 12.60per cent in 2020, while Ecobank Transnational Incorporated reported 18.99 per cent ROE in 2021 as against 13.3 per cent in 2020.

The Central Bank of Nigeria (CBN) had maintained that ROE fell in December 2021 relative to December 2020.