Net profit at Guaranty Trust Holding Company (GTCO) accelerated by 88.6 per cent for the financial year 2024, according to its audited report released on Friday, as an elevated interest rate environment in Nigeria laid the foundation of record profit for many lenders.

Nigeria’s biggest lender by market value also announced on Friday a final dividend of N7.03 per share, taking its total dividend to N8.03 (compared to N3.20 for 2023) and its potential payout for the year to record N269.4 billion.

Shares in the banking group went up by 6 per cent at the end of trade in Lagos following the news.

The corporation saw its gross earnings rise 81.1 per cent to N2.1 trillion, largely supported by a substantial increase in interest income, its main revenue source.

Net interest income, which indicates the difference between the income generated by a bank and what it pays to savers for keeping their deposits, surged by as much as 142.4 per cent to N1.1 trillion.

In order to curb soaring price levels in Nigeria, the central bank raised the reference interest rate by 875 basis points last year, opening up opportunities for banks to earn higher interest income by charging more for loans.

That also hampered the credit quality of many lenders in that the sharp hikes in borrowing rates during the year triggered payment defaults for borrowers. GTCO set aside N136.7 billion, almost one third more than it did in the preceding year, to cover potential loan defaults of borrowers as required by regulation.

Net fee and commission income jumped to N189.7 billion, implying a 73.4 per cent growth. That was spurred by notable improvement in commission on foreign exchange deals and in account services, maintenance and anciliary banking charges.

The performance also derived strength from a 40.9 per cent surge in unrealised fair value gain on financial instrument, which accounted for the bulk of the group’s other income of N499.1 billion.

Personnel expenses rose by 89.4 per cent during the period under review. Other operating expenses jumped by more than half, driven by spikes in technological & service related expense and in outsourcing services.

Pre-tax profit grew more than twofold to N1.3 trillion, while after-tax profit increased to N1.1 trillion from N539.7 billion.

GTCO operates in ten markets in Africa and also runs a subsidiary in the UK. Apart from Guaranty Trust Bank (its commercial banking arm), other subsidiaries include Guaranty Trust Fund Managers Limited, Guaranty Trust Pension Managers Limited and Habari Pay.