GUARANTY grew its gross earnings in 2020FY by 4.58% YoY to NGN455.23bn on the back of a relatively strong growth (+11.06% YoY) in non-interest income. Interest income, which was pressured – as expected- by low interest rates, increased only marginally by 1.53% YoY. Also as expected, NIM contracted, albeit slightly, to 9.26% (vs. 9.28% in 2019FY) supported by efficiency in deposit mix. The bank’s non-interest income on the other hand, was buoyed by FX revaluation and financial instruments trading gains, as fee-based income (net) declined significantly by 14.80% YoY. Meanwhile, other than the spike in impairment charges, costs were largely kept in check with cost-to-income ratio at 38.24% (below management guidance of 40%) from 36.11% in 2019FY. The bank’s improved CASA mix and low cost of funds (1.19% from 2.30% in 2019FY) helped mitigate the impact of higher OPEX (due to COVID-19 donations and regulatory charges). Ultimately, the bottom line increased by 2.32% YoY to NGN201.44bn.
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