As one of the most profitable banking entities of FY'24, with a PAT of N1.02 trillion and an ROAE of 48.6% (vs. ZENITHBANK's PAT of N1.03 trillion and ROAE of 32.5% & UBA's PAT of N766.6 billion and ROAE of 28.1%), GTCO appears poised to deliver strong core earnings in FY'25. For context, c.58.0% of GTCO's operating income emanated from core earnings in FY'24 compared to 41.3% in FY'23, providing a useful pointer to stability. This consideration is critical due to the relative stability of the Naira in Q1'25 and its potential impact on YoY non-core earnings growth.
Elsewhere, we welcome the proactive measures taken by GTCO to derisk its balance sheet, as this creates better opportunities for risk asset growth. This initiative seeks to prioritize quality interest-earning assets (IEA) with higher risk-adjusted returns, thereby improving the outlook for core earnings. Nevertheless, we expect PAT to grow modestly due to the potential impact of a projected contraction in FX-induced fair value gains.
