GTCO Tops Banking Sector with 27.86% Cost‑to‑Income Ratio, the Lowest Overall

Kayode Tokede  

Despite regulatory costs and high inflation—key drivers of operating expense growth—Guaranty Trust Holdings Company Plc (GTCO) posted the lowest Cost‑to‑Income Ratio (CIR) in the 2025 financial year.

Against nine other Deposit Money Banks (DMBs) examined by THISDAY, GTCO recorded a CIR of 27.86 percent, down from 24.14 percent in 2024.

The DMBs investigated include: Fidelity Bank Plc, Stanbic IBTC Holdings Plc, Wema Bank Plc, Sterling Financial Holdings Company Plc, and Jaiz Bank Plc.

Other banks in the study are: Access Holdings Plc, First Holdco Plc, United Bank for Africa Plc, and Zenith Bank Plc.

CIR is a key indicator of a bank’s profitability, showing how efficiently it operates. A lower ratio signals higher profitability.

In banking, a lower CIR reflects better cost management, higher productivity, or both. It should be considered alongside metrics such as Return on Equity (ROE) and Net Interest Margin (NIM) for a comprehensive assessment.

Typically, an ideal CIR falls between 40 percent and 60 percent, though this range can vary by industry and region.

Inflation in the major African economies where most of these DMBs operate remained generally moderate toward the end of 2025.

Kenya’s inflation held at 4.5 percent, below the policy midpoint, while Tanzania, Uganda and Rwanda continued to record stable, low single‑digit inflation, reflecting effective monetary policy and easing price pressures. Ghana recorded the sharpest disinflation, with inflation falling to 5.4 percent, its lowest level since 2022.

Nigeria’s headline inflation rate eased significantly to 15.15 percent in December 2025, from above 30 percent in 2024, following a methodological revision by the National Bureau of Statistics (NBS).

The NBS shifted the base year from 2009 to 2024 to better reflect consumer spending. The Monetary Policy Rate (MPR) was held at 27.50 percent before a slight cut to 27 percent in September, alongside adjustments to the corridor and CRR. The sharp decline also reflects CPI rebasing to a 2024 base year using a 12‑month average, which helped smooth base effects.

THISDAY analysis of Nigerian DMBs showed that GTCO had declared 48.03 percent in 2022, one of the highest in over 10 years.

However, GTCO in 2025 reported N475.4 billion operating expenses (OPEX), about a 17.9 percent increase over N403.0 billion in 2024, with non‑controllable cost mix rising to 16.3 percent of total operating expenses in 2025 from 14.5 percent in 2024. Operating income closed 2025 at N4.09 trillion, about a 31.05 percent increase over N312 trillion in 2024.

“Improved operating metrics, with a declining cost‑to‑income ratio and expanding returns, reflect broader ecosystem efficiency gains and platform scalability,” the lender explained.

GTCO also led the banking sector with a Return on Average Equity of 70.2 percent in 2025, up from 48.2 percent in 2024.

The lender emerged as the second most profitable bank after Zenith Bank, reporting N1.23 trillion profit before tax in 2025.

Similarly, other Tier‑I and Tier‑II banks investigated by THISDAY recorded CIRs below 70 percent during the period under review.

Data compiled by THISDAY showed that Sterling Financial Holdings Company posted a CIR of 63 percent in 2025, down from 72 percent in 2024, the highest among the investigated 10 DMBs.

Stanbic IBTC Holdings declared a CIR of 36.80 percent in 2025, down from 37.70 percent in 2024, while Zenith Bank posted 45.20 percent in 2025, up from 38.90 percent in 2024.

Zenith Bank, in a statement, said, “The group’s cost‑to‑income ratio increased to 45.2 percent, stemming from an increase in impairment charge and sustained inflationary pressure.”

Other banks with a CIR below the 60 percent threshold were Fidelity Bank at 54.60 percent in 2025, up from 42.90 percent in 2024, and UBA, which declared a CIR of 59.40 percent in 2025, up from 49.50 percent in 2024.

Commenting, the Vice President of Highcap Securities Limited, Mr. David Adnori, stated that the ratio measures a bank’s efficiency in managing its expenses relative to its income.

He said, “It shows how much money the bank spends to generate a naira of income, for example, GTCO – the bank burns just N0.28 to generate N1.00 income in the period under review.”

He commended banks operating in Nigeria and other parts of Africa for remaining resilient amid macroeconomic challenges.

On his part, Financial Analyst and Chief Research Officer of InvestData Consulting Limited, Mr. Omordion Ambrose, added that the ratio measures a bank’s efficiency and that it is important for banks to cut expenses to generate more profit.