GTCO Financial Results

PBT Trend ⚫ The Group's Gross Earnings dipped marginally by 1.6% to N447.8bn in FY 2021 from N455.2bn in FY 2020 primarily as a result of a reduction in Interest Income from N300.7bn to N266.9bn (11.3%), which was in turn partly offset by growth in Fees and Commissions (N74.1bn vs N53.2bn) and Other Income (N84.4bn vs N76.8bn) during the same period. .. The reduction in the Interest Income line was largely due to yield compression on the Earnings Assets portfolio notwithstanding the growth in average volumes of Earning Assets to N2.48tn from N2.22tn during the same period. Yields dropped to 8.0% in FY 2021 from 11.1% in FY 2020 on the back of a reduction in the yield earned on the Investment Securities Portfolio to 4.5% in FY 2021 from 12.8% in FY 2020 leading to a significant decrease of 39% (N42.7bn) in Interest earned on FIS to N67.7bn in FY 2021 from N110.4bn in FY 2020. The 8.2% growth in Gross Loans offset the 0.5% decline in yields on same (10.5% in FY 2021 vs 11.0% in FY 2020) resulting in a 5.1% growth in Interest income on Loans and advances to N195.02bn in FY-2021 from N185.5bn in FY 2020 which was not adequate to completely mitigate the impact of the 39% fall in Interest income on FIS, therefore culminating into 11.3% reduction in the total Interest Income earned in FY 2021. ⚫ The Group effectively improved its Cost of Funds to 0.9% from 1.2% during the same period to douse the impact of Earning Assets yield compression on Net Interest Income; improving Interest Expense by 1.7% (N788.3mn) from N47.1bn in FY 2020 to N46.3bn in FY 2021 to achieve Net Interest Margin (NIM) of 6.74% in FY 2021 from 9.26% in FY 2020. ⚫ In further response to the yield compression, the Group grew the volume of its fee based transactions resulting in a 39.4% (N20.9bn) growth in Fee and Commission Income to N74.1bn in FY 2021 from N53.2bn in FY 2020. Fees and Commissions growth can be attributed to NIP volume expansion and other digital related transactions resulting in a 79% increase in e- Business related income to N21.1bn in FY 2021 from N11.7bn in FY 2020 and 34% growth noted on Current Account Maintenance Charge (CAMF) from N12.5bn to N16.7bn on the back of 38% growth in Turnover Volumes to N24.8trn from N17.9trn during the same period. Trading efficiencies sustained Trading gains at N22.4bn in FY 2021 from N24.5bn in FY 2020 whilst revaluation gains from the Group's US$1.2bn long position and Income on forward transactions; which comprised principally of Derivative gains, added N45.0bn to Other Income in FY 2021. This is however a drop from N56.6bn in FY 2020 due to the difference in the closing Naira Exchange rate against the US Dollars at the I&E Window in FY 2021 relative to FY 2020. ⚫ Loan Impairment charges decreased by 56.4% from N19.6bn in FY 2020 to N8.5bn in FY 2021 due to the level of Risk reserves built up from previous years, improvement in the outlook of macro-economic variables used in the predictive ECL impairment model amidst waning effect of the Covid-19 pandemic and improvement in the quality of the loan book. The Group's total Operating expense (OPEX) grew by 10.1% (N14.8bn) from N147.4bn in FY 2020 to N162.3bn in FY 2021 primarily from increased regulatory cost associated with Balance Sheet size i.e. AMCON levy and NDIC premium, incremental depreciation charge arising from Capital spend and impact of adverse exchange rate movement against the US Dollars across our jurisdiction of operations in FY 2021. ⚫ PBT contributions from outside Nigeria improved from 15.3% in FY 2020 to 23.5% in FY 2021. • Overall, the Group closed FY 2021 delivering a PBT of N221.5 bn representing a dip of 7.0% from N238.1 bn posted in FY 2020. As the Financial Holding Company takes shape, we expect that the revenue base will be further expanded and strengthened with income from Non-Banking Subsidiaries (i.e. Payments, PFA and Asset Management) with resultant improvement in profitability metrics. PBT (NBN) 231.71 238.10 221.50 215.59 197.69 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Return on Average Assets and Equity 29.96% 30.90% 31.16% 26.83% J 5.19% Dec-17 5.56% 5.59% 4.63% 3.37% Dec-18 ■Return on Average Assets (ROAA) 20.60% Dec-19 Dec-20 Dec-21 ■Return on Average Equity (ROAE) 17

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