GUARANTY Trust Holding Company Plc (GTCO) has been fined a N1.30 billion fine for breaching foreign exchange market operational guidelines in Ghana.
The bank was also slammed with an N871,000 fine for similar offences in Rwanda, checks by The ICIR on the bank’s half-year audited financial statements released on Wednesday, September 11, revealed.
A breakdown of the sanction from Rwanda indicated that GTCO got a N560,000 fine for non-compliance noted for the bank taking fees which are not allowed by the regulator, and a N311,000 fine for non-compliance with the exchange rate applied by commercial banks in Rwanda.
Further analysis of the bank’s half-year financial statement revealed that GTCO paid N188.25 million in fines for contravening various offences in the course of its operation in Nigeria.
A breakdown of the sanction showed that GTCO paid a penalty of N124.25 million in respect of 2024 compliance-related/bank e-mail returns; N54 million in respect of consumer protection regulations; N8 million in respect of 2023 CBN’s foreign exchange examination on the bank; and N2 million in respect of 2024 CBN’s mystery shopping exercise on the bank.
Put together, GTCO reported N1.49 billion in infractions in the course of its operations in the review period from the three countries. While GTCO has its headquarters in Nigeria, the bank has subsidiaries in Ghana and Rwanda.
“As disclosed in Note 45 to the consolidated and separate financial statements, the Company and its “Guaranty Trust Bank Limited paid penalties in the sum of N188.3 million in respect of contraventions of certain sections of the Banks and Other Financial Institutions Act 2020 and certain circulars issued by the Central Bank of Nigeria, during the period ended 30 June 2024,” Ernst & Young (EY). The bank’s independent auditor stated in their auditor’s report.
The bank’s overall performance indicated that a mixed bag of favourable factors helped propel GTCO’s bottom line profit to the highest level ever reached by any Nigerian quoted company.
GTCO reports N1 trillion pre-tax profit in 6 months
A cursory look at the half-year financial statement showed that GTCO’s profit before tax more than tripled to N1 trillion from N N327.40 billion in the first half of the year, while profit after tax advanced to N905.6 billion from N280.5 billion.
A key profitability metric that resulted in the huge gains came from net interest income, which measures the difference between how much the bank charges on loans or earns on financial assets and how much it pays for borrowings or for keeping depositors’ money.
On the back of the CBN’s aggressive hawkish stance on its monetary policy resulting in increasing interest rates, this sharply raised lending costs.
Since the beginning of the year, the CBN has lifted benchmark interest rates by 800 basis points as a monetary policy tightening tool to temper the inflationary pressures, fuelling a cost-of-living crisis in the country.