Guaranty Trust Holdings Achieves Lowest Cost-to-Income Ratio in FY2025
Guaranty Trust Holdings Company Plc (GTCO) has reported the lowest cost-to-income ratio (CIR) among its peers in the fiscal year 2025, despite facing pressures from rising regulatory costs and higher inflation, which have driven operating expenses upward.
In a comparative analysis of nine other deposit money banks (DMBs), GTCO recorded a CIR of 27.86%, marking an increase from 24.14% in 2024. The banks included in this analysis are Fidelity Bank Plc, Stanbic IBTC Holdings Plc, Wema Bank Plc, Sterling Financial Holdings Company Plc, Jaiz Bank Plc, Access Holdings Plc, First Holdco Plc, United Bank for Africa Plc, and Zenith Bank Plc.
The cost-to-income ratio is a critical measure of a bank’s profitability, reflecting its operational efficiency. A lower CIR indicates higher efficiency and profitability, making it a vital metric for evaluating financial performance. While a CIR below 40% is generally considered ideal, industry standards may vary by region.
Across Africa’s key economies, inflation rates remained relatively moderate through 2025. Kenya recorded an inflation rate of 4.5%, while Tanzania, Uganda, and Rwanda posted stable low single-digit inflation rates, demonstrating effective monetary policies and easing price pressures. Notably, Ghana experienced significant disinflation, with its inflation rate dropping to 5.4%, the lowest since 2022.
In Nigeria, the headline inflation rate saw a substantial decline from over 30% in 2024 to 15.15% in December 2025. This decline followed a revision in methodology by the National Bureau of Statistics (NBS), which changed the base year for the Consumer Price Index (CPI) from 2009 to 2024, more accurately reflecting consumer spending. Although the Monetary Policy Rate (MPR) was maintained at 27.50%, it was slightly adjusted to 27% in September alongside corridor and Cash Reserve Requirement (CRR) changes.
Despite the challenges, GTCO’s operating expenses (OPEX) increased to N475.4 billion in 2025, a rise of approximately 17.9% from the previous year’s N403 billion. The cost mix also became less manageable, escalating from 14.5% of total operating expenses in 2024 to 16.3% in 2025. Operating profit for the year reached 4.09 trillion naira, representing a 31.05% increase from the previous year’s projected figure of over 312 trillion naira.
GTCO showcased strong operating metrics with improved cost-to-revenue ratios and heightened margins, attributed to broader ecosystem efficiency gains and platform scalability. With an average return on equity (ROE) of 70.2% in 2025, up from 48.2% in 2024, GTCO emerged as the second most profitable bank in the sector, reporting a pre-tax profit of N1.23 trillion, trailing only Zenith Bank.
Analysis of Tier-I and Tier-II Banks
Other banks in both Tier-I and Tier-II categories also demonstrated a CIR below 70% during this period. Data reveals that Sterling Financial Holdings’ CIR decreased from 72% in 2024 to 63% in 2025, the highest among the surveyed DMBs. Meanwhile, Stanbic IBTC Holdings recorded a CIR of 36.80%, a slight increase from 37.70% in the prior year. Zenith Bank’s CIR rose to 45.20%, up from 38.90% in 2024, primarily due to increased impairment charges and ongoing inflationary pressures.
Fidelity Bank’s CIR was measured at 54.60% in 2025, an increase from 42.90% in 2024, while United Bank for Africa reported a CIR of 59.40% for the same period, up from 49.50% the previous year. Analysts emphasize that the cost-to-income ratio serves as a critical measure of operational efficiency within the banking sector.
David Adnoli, Vice President of HiCap Securities Limited, noted that the CIR demonstrates how banks manage their expenses relative to their income levels. For instance, GTCO effectively generated 1 naira of income while spending only 0.28 naira during the survey period. He commended African banks for their resilience in navigating macroeconomic challenges.
Omordion Ambrose, Chief Research Officer at Investdata Consulting Limited, further emphasized the importance of managing expenses to enhance profitability. He asserted that a lower CIR signifies higher operational efficiency, which is vital for banks aiming to maximize shareholder value.
