Earnings Call: H1 2026

Aug 28, 2026

Summary

H1 loan growth was 0.48% as lending shifted toward fixed income, while a NGN 46bn FX revaluation loss pressured returns. H2 plans focus on loan growth, hedging, and a retail/SME mix to pursue FY targets amid falling rates and deposit competition.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the GTCO 2026 half-year investors and analysts conference call. As a reminder, all participants are in listen-only mode. Should anyone need assistance during the conference call, they may signal an operator by pressing star and 0 on their telephone. At this time, I would like to turn the conference over to the Group CEO of GTCO, Mr. Segun Agbaje. Please go ahead, sir. Good afternoon, everybody. Thank you so much for all those who have dialed in. On the call with me today are Mrs. Miriam Olusanya, Managing Director of Guaranty Trust Bank, and Banji Adeniyi, who is Group CFO. Investor presentation has been put up for a couple of days now, so we will go straight to Q&A. I will take the first question. Thank you for dialing again. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Nabila Mohammed, Chapel Hill Denham. Good afternoon. Thank you for the opportunity to ask questions. Please confirm you can hear me. Yes, I can. Thank you. Thank you. I have a couple of questions, I am going to start with loan growth. I understand from the presentation that has been put up, your guidance for FY 2026 is 25%. I am just wondering what lending pipeline will support this particular target, considering where the first half of the year already shown us just 0.48% in terms of net loans. That is my first question. On profitability, I understand again that you are guiding towards 30% return on average equity. Which core earnings drivers do you think would support achieving this particular target? On tax, during the FY 2025 call that was held much earlier this year, you did mention that there are plans to bring that effective tax rate down to 27%. I am just trying to understand what we should expect in the second half of the year. There was also some talk around the fair value losses on your presentation slides, particularly slide 17, where you attributed the NGN 46.2 billion loss to naira appreciation. I am just trying to understand how much of that was unrealized and how exposed these positions to further appreciation if we see that happen in the second half of the year. Finally, sorry, my questions are a bit long, but the last question is on what you think, what are your thoughts around the MPC’s decision during their September meeting? How do you think that would shape business going forward from a lending standpoint and from a cost efficiency standpoint? That will be all from me, please. Thank you. Okay. Thank you very much. That is a mouthful, but I am going to try as much as I can, hopefully, maybe I will help answer some of the questions other people might be thinking of. Just like you said, in terms of loan growth, our guidance had been 25%. As we got into the year, we are half a percent. What we found for loan growth is that for the type of loans, if you look, 80% of our loans are corporate, most of the corporate loans were being priced below the SDF rate and the one-year T-bill rate. For us, it did not make a lot of sense. What we did was pivot towards fixed income growth, so we grew fixed income 22%. We will continue to look to see if we can catch up there, but as you can see, that for me is not really where our problem is because we were able to compensate with some of the loan growth with fixed income. Much of an issue there from our perspective. In terms of, you said ROE is about 24.6%. We are going to try to push the profitability in the second half of the year. It might also time with your third question, or fourth, sorry, which is the revaluation losses, and I will come back to it. The reason the ROE is not a 30% is because we took NGN 46 billion in revaluation loss. If we had not taken that, ROEs would be close to what we need to be, but we will push it in the second half of the year. I also do not want to make the revaluation loss an excuse because when we enjoyed revaluation gains two years ago, we did take it. We will try to make up. The revaluation loss, we have managed to hedge it in the second half of the year using credit-linked notes, so we do not expect further deterioration, and this is probably the revaluation loss we hope you will see for the year. Tax rate is about 31%. We are buying bonds. We are trying to kind of change the mix of our fixed income portfolio, put more bonds than bills, which are tax deductibles, and hopefully that will bring the tax rate down from the current 31% you see at half year. In terms of MPR, I think it was to be expected. Inflation is coming down, so I do not think we could have expected to leave MPR at 26.5%. Also, SDF came down 200 basis points. Obviously, the direction of interest rates for now is downwards. I, in my own opinion, think it is a good thing. It will help GDP growth. I focus less on the 350 basis points cut in MPR, and I focus more on the cut in SDF. So if you ask me what I think will happen, I think you will see about 200 basis points cut in terms of the loan portfolio of most banks, and not 350. I hope I have answered all your questions, Nabila. Hello? I am sorry, but Ms. Mohammed's line dropped, so the next question is from Stephen Chima, CardinalStone. Okay. Hi. Good afternoon. Trust you can hear me clearly. Yes, yes, I can. Thank you. All right. I have a couple of questions, right? I was wondering, would there be some sort of pivots in terms of capital allocation strategies? I mean, we know the first half of the year results, which of course was a quarter ago, and since then, we've seen yields fall. We've also seen the MPR reset as well. What's the bank's plan in terms of sort of revitalizing core earnings and supporting net interest margins through the rest of the year? Secondly, we also noticed a year-on-year decline in net fee and commission income for the first time in as many years. Could this be a consequence of the new zero processing fee on POS transactions, right? The merchant service charges strategy that the bank is, of course, doing to deepen its cheap deposits, right? Again, how far has that strategy What's the success of that strategy in terms of deepening the growth that we are seeing in deposits? Because, I mean, I think in the first half of the year, most of the growth came from The strongest growth we saw was in term deposits, right? We'd like to get a sense of how that strategy is deepening deposits. Lastly, the bank is guiding for a PBT of NGN 1.4 trillion, right? That implies a PBT of about NGN 800 billion in second half of the year. It would be nice to get a sense of how the bank is looking to achieve this as well. Thank you. Okay. Let me just take down your last question, which was PBT guidance. Okay, in terms of capital allocation, first of all, I don't think you're going to see us do anything massive. If you look at our capital allocation, which you refer to, the NIM is strong at 11.8%. Our problem is not the NIM. Our problem is that we just need to scale up both sides of the balance sheet. We'll keep doing what we're doing. Like I tell people, a 20% yield on OMO bills and even NTBs is still very good yield. I don't see a 350 basis point drop in loans. I see about 200 basis points. We'll keep pushing. We'll push the loans where we find them, where they make sense for us, and we'll keep a balance on the two, both the Excuse me, can we move to the next question? Hello? Hello? Yes, we can hear you. Yes, can we move- No, no. Sorry. I am still answering Steve's questions. Okay, thank you. When I look at fees and commissions, not anything down to POS. I said, we weren't making anything before anyway. The drop in fees and commissions, really credit-related fees. When you have like 80% of your loan book in the high end, you basically are not charging a lot of fees. Nothing to do with the POS strategy. POS strategy is working very, very well. If you look in the presentation, you will see the volumes, POS volumes are up over 300%. We are getting the collections. We will continue to push. We are going to add loans to that strategy. We are pretty happy with that. It has nothing to do with why fees and commissions went down. In terms of our PBT guidance, you are right. We are going to have to push a bit. When I answered Nabila Mohammed's question, told you we hit a bit of a headwind in terms of revaluation gain, loss of NGN 46 billion. Without that, would have been at about NGN 650 PBT, so the mountain to climb wouldn't have been so high. We made sure we hedged any further revaluation losses. There was an appreciation of 4%. We are aware what the second half target is to hit the NGN 1.4, and we are going to push for it. One of the things we don't expect in the second half of the year is more revaluation losses. Hope that answered your questions. Yes, thank you very much. The next question is from Somo Molajane, Old Mutual Investment Group. Good afternoon, everyone. Good afternoon, Stephen. Good afternoon. Thank you. Thank you. Just a quick question again. I think you already touched on it. In terms of the effective tax rate rising to about 31% from 25%, did you say that that's due to a difference in tax treatment on your fixed income securities? Could you please just explain Yes the tax treatment and how that affects the balance sheet? Okay. In the past, your interest income on T-bills was tax-deductible. It is no longer. If you look at our fixed income book, most of it was T-bills, so we didn't enjoy any tax advantages. What we are trying to do is make sure that that fixed income book is now 70/30, and if you have about 30% bonds, that will actually help your tax rate because the interest income is a tax deductible. Okay, so the T-bills are what's not giving better tax anymore? Yes. It's investing with government bonds as opposed to T-bills? Yes. We're not suddenly also going to get out of treasuries completely because as you can imagine, with bonds, there's an interest rate risk. We're going to try to balance that portfolio about 70% T-bills, 30% bonds. The interest income on the bonds will be a deductible, and that should help the tax rate. Okay, perfect. Thank you so much. Thank you. The next question is from Desmond Gabriel, WSTC Financial Services. Thank you. My question is that we saw about a NGN 1 trillion increase in the investment securities held at amortized cost. However, there was a decrease in the interest income on that same investment securities. I want to ask if it is a timing issue that has not made the interest income reflect in the P&L? Well, it is yes. It is the time at which the increase happened. Probably happened closer to the end of the first half, and so you will see as we amortize the interest on the bills, the interest income will go up, yes. All right, thank you. Okay. The next question is from Timothy Wambu, Absa. Hello. Good afternoon. Thank you, Segun, for taking our questions. Great, great. Not sure whether this question was asked because I've joined slightly late. Okay. It's with regards to the proposal for the HoldCo to raise capital. I just wanted to get a sense of your view. What's the latest? What's the industry view there? Is this something that you think might happen anytime soon? Second one is on, you're sitting on significant capital levels. I know you've hinted at paying out, I believe, more than 50% of earnings going forward. Any further updates on how this capital will be deployed? And maybe in the event that the HoldCos have to raise capital, is that something that's perhaps transferable? I'm just maybe reaching out there. And then, on the losses that were there on the financial instruments, is it possible to be a bit more clear as to which finance instrument this is? And then lastly, your NPL coverage ratio of 46.5%. How comfortable are you with such an NPL coverage ratio? I know you end up including your risk reserves, but are they really available as cover? Thank you. Sorry, let me just answer the last one since I hadn't written it down, then I'll go back. I think that we're very comfortable with our coverage ratio at the moment, and the reserves are available. When we do our ECL model today, as you know, because I know you cover Nigeria, the macros are very strong. Inflation's down, exchange rate is up 4%, reserves are over NGN 54 billion. So when you look at your ECL model today, it must reflect the improving macros, which is why our cost of risk is 0.58. So we're very comfortable where the coverage ratio is. Also, the loan book has been very, very heavily de-risked. When we put all those things together, we're fine, and by the time we add the reserves which are available, we think we're in a good place with that. In terms of the HoldCo circular, honestly, I wish I could say more because I'm not really the regulator. Remember that what it was an exposure draft. Everybody was allowed to comment and give their feedback on the exposure draft. We'll have to see what the regulator decides. I mean, obviously as a holding company, we gave our own views, and we'll wait and see whether the capital from the bank will be transferable because the bank is NGN 500 billion. I mean, there are different scenarios that could play out, but I'm not going to try and predict what the regulator will do. What we saw was an exposure draft. We've all given our comments, and we'll see how it plays out. In terms of what we're doing with the capital, we are working the capital. If you look, we said we would do branching out. We've done quite a bit of branching out in West Africa. We've also rolled out Finacle across board, which means we've used a lot of it for technology. We only have the U.K. left really in terms of Finacle migration. So technology spend has happened. We're very comfortable. Capital adequacy ratio is about 34.8%. I'm going to shoot for a dividend payout ratio of about 60% this year. I think we can absorb that comfortably. You talked about the revaluation losses. The revaluation loss of NGN 46 billion we have is due to our long position. At one time, it worked for us, which was our equity. It's not working for us this year. There's no point crying about it. What we've tried to do is hedge any further losses in the second half of the year. Great. I think that is very clear. Just on the fact that you look at Nigeria and we understand the macros, and this is with respect to the coverage ratio. Sometimes other markets get dinged when their coverage ratio is nowhere close to 100%. I don't know how you will respond to that, but you've clearly explained. I'm just wondering, do you get that question often from investors? Sorry, which one? I missed the first half of the question. Sorry. Yeah, sorry. My apologies. No problem. When you said that the coverage ratio of 46.5% is comfortable and you are okay with it given the macros in Nigeria, I am alluding to the fact that certain other markets get dinged when their coverage ratio is nowhere close to 100%. I wonder whether this is a question you would normally have to field with investors. Yeah, we have, but we have the reserves, which put us at 103. The same way we've explained it is the way I've explained it to you, that with the reserves, we're comfortable, and that if you look at what we've done with the loan book in the last few years, we are actually quite comfortable where we are. If we feel like there's some risk coming onto the balance sheet, we will increase that coverage ratio. All right. Thank you. Thank you. The next question is from Ronak Gadhia, Dunross. Good afternoon, Segun. Thanks for Good afternoon. the time. Can you hear me? Yes, I can. Okay, great. Thanks for the time. Mine really are just maybe follow-up of what you've answered so far. Perhaps we can just start with the capital question. The capital adequacy ratio dropped quite meaningfully for the first six months, and I can see that is driven by a significant increase in operational risk. Perhaps if you could just help us understand why that increased quite substantially. The second one is around the balance sheet. Like you mentioned, the key issue right now is not so much the structure of the balance sheet, it is just that it is relatively under-leveraged. Maybe you could share some thoughts in terms of how you address that problem. The third one, sort of related to the second one, as I mentioned before and as you mentioned, the structure of the balance sheet is not much of a problem right now. You are earning pretty decent yields on OMOs, T-bills, but the central bank has made it clear interest rates are directionally headed downwards. As you head into next year, what are your thoughts on the potential headwinds you could face from declining rates and how quickly you can adjust to maintain your NII? Thank you. Okay, let me start with the last one. You are right, and like I said earlier in the call, I believe rightly so, the trend of interest rates is downwards. Inflation is down, so there is no need for interest rates to be where they are. In fact, in my own opinion, we as banks have been quite lucky. I thought we would have two different halves. I expected elevated in the first half and come down in the second half. So, we have even probably enjoyed two, three months more than I thought we would. We will keep our NIM. We will grow the loan book. We will try to grow it at a part of the business that is properly priced without taking on too much risk. If you look at half year, we started that already. You will see that close to 13% of the loan book is retail. SMEs approaching about 2%. Hopefully next year, we are going to run these two businesses about 20% of the loan book. If we are able to do that would help preserve the NIMs. It will also mean that the balance sheet leverage will get better. We will continue to play the high end, but if we are able to bring 20% of the loan book in SME and retail, it would help the leverage. Capital allocation, sometimes we just look, and if we think that things look a bit sticky in terms of operational, we have the situation in Iran, we look at world geopolitics, we are in other countries, but Nigeria, not every country is an export, some are imports, so we will price some capital allocation in. We also have certain sectors where we have exceeded some of our loan limits, like upstream, so we will allocate some capital for that. That's all you've seen there. Understood. Thank you. Thank you. The next question is from Dean Tlotleng, Steyn Capital Management. Hi. Thank you so much for making the time to host this call. I have a couple of questions on my end. Firstly, if I look across your earnings outside of Nigeria, so the U.K., rest of West Africa, East Africa, earnings pretty much went backwards in those regions. Could you just please let me know how you are thinking about earnings going forward in these regions, and if we should expect continued weakness in earnings? Second question is, the loan book in Ghana is up massively year-on-year, and I just want to get a sense of, firstly, what is driving this growth and how are you thinking about asset quality there? Lastly, on the guidance itself, I hear that you are planning to push in the second half to hit that final year earnings target, but could you please unpack how you are planning to do that and what are some of the levers you are planning to employ to hit that target? Thanks. Okay, let me start from the third one. It is always easier because then I do not have to write it down. First, our guidance was about NGN 1.4 billion. Like I explained earlier on, if we had not taken the 46% revaluation loss, the naira would have ended first half of the year at 650. So we actually have a nice momentum going, and that if we do not, even if we stayed flat at 650, we should be able to do about NGN 1.3. So even if we do not hit the NGN 1.4, which we are going to give it everything we can by loan growth, by making sure the NIMs are okay, keep the trading gains up, and make sure we do not take any other revaluation losses. I think if we are able to balance those things nicely, we should be able to breast the tape. I will then go to the first question you asked. Actually, the revenue of the subsidiaries are not down. What is down is, what has happened is that the naira has appreciated. So when we convert their dollar earnings, which are up, by the time we get into naira, it is down. That is because the naira, as we said, between year-end and now, has seen a 4% appreciation. So West Africa is up, U.K. might be slightly down, East Africa is also up. So the only region and the only banking sub that is down on last year is U.K. Everybody else is up. But like I said, you have an appreciating naira, so when we do translation, it is down. The Ghana loan book is not really a problem. A lot of the Ghana loan book is actually cash-backed. So, no, we are not taking a lot of risk in Ghana. I think the NPL of Ghana is even somewhere around 2%, 3%. We are very mindful of the fact that money has been lost in Ghana in the past, so we are not doing anything crazy. I believe those are your three questions. Yeah. Thank you so much. Could you just please, just a few last questions, just please unpack what is going on in the U.K. Secondly, just going back to the fee and commission income, specifically the touchpoint commissions, those were down pretty meaningfully. Could you please unpack what happened there? Actually, the touchpoint commissions are not what are down. What is really down is the credit-related fees. The touchpoint commissions, if you look volume, and volume is up, which is where we make our money. So those are not down, and you have to take a closer look at it. Also, the touchpoints have changed a bit. When you look at, for example, what we used to call card income, some of that is in cards, POS, but people are also doing Pay-with-Transfer. When you Pay-with-Transfer, to see what the commissions are, you have to put them together, and then you will see what the commissions are doing well. The problem with the U.K. is very simple. We used to have a lot more central bank deposits on our books in the U.K. That has come down drastically. The core business is still growing, which is the mortgage book and the private sector loans, but we are going to have to make up some of the central bank deposits, and that is why the U.K. is down to about 1% of group when it used to be about 1.7%. Okay, excellent. Thank you very much. Thank you. The next question is from Mubarak Ajenipa, Zrosk Investment Management. Good afternoon. Can you confirm that you can hear me? Yeah. Yeah. I think the majority of my question has been asked, but I just want to get a sense of what actually happened to the loan book yield in Q2. Because when I look at the implied loan yield guide, I saw that we saw a bit of decline in terms of the yield on that loan book. Also, another question I want to ask is really around the sustainability of the net interest margin, right? Because I think I get that you mentioned that, of course, 11% is actually relatively high at this point, but going into one year, as you mentioned, interest is basically coming down, and I've seen inflation trending downward as well. Do you think you are going to possibly change the structural asset allocation mix in order to be able to compensate for that you might potentially get from investing in this schedule, maybe increasing much more allocations for loan? Yeah. Just to get your sense around how you think you can actually sustain this margin outside of 2026. So yeah, I think that would be of mind. Okay. Loan book yield in the second quarter, I had said earlier on in the call, and I am sure you cover banks well, so you would know that what has happened in the corporate space. Which is where 80% of the loan book is the banks are actually pricing at about 18, between 16% and 18%. So if you want to play in that space, you have had to bring down your interest rate to the corporates, which has affected the yield. In terms of NIMs holding, the NIM is very healthy right now at 11.8%. Like I said, it is going to come down. Even what we advised was 11%. But you answered the question yourself. We are going to change the mix a bit. We are going to do more retail and SMEs. I had said earlier in the call that that would be about 20%. If you do 20% of your loan book, it will help you preserve some of the NIMs. But the truth is, the NIMs are going to come down, so you are going to have to scale up the balance sheet a bit. So what you would lose in NIMs, you will make up in volume, and that has to be the plan for 2027. Okay. Thank you so much. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Stephen Chima, CardinalStone. Mr. Chima, your line is open. Mr. Chima, we cannot hear you. Maybe your line is on mute. Please check your microphone, please. The next question is from Habeeb Oladehinde, WSTC Financial Services. Good afternoon. Yep, good afternoon. Good afternoon. Can't hear you. Good afternoon. Yeah. I have few question. First is- Honestly, I cannot hear you. Habib, I cannot hear you at all. Good afternoon, sir. Can you hear me now? Yes, please start again, if you do not mind. Good afternoon. My question is, firstly, given us okay, and we expect to see down working in the history. I promise you, I really cannot hear you. You are using a really bad mic, so you have to kind of talk into it because it is very muffled. Good afternoon, sir. I hope I am audible now. Yes, thank you. Okay. My first question is, we expect a downward trend in the fixed income market, given that GT Holding Company has a significant portion of investment income. How do you plan to navigate that? The second question is, there has been slow growth of the loan year to date, about 0.5 year to date. Given the low interest rate, should we expect an increase in loan book now, particularly toward Q3 and Q4? The third question is, in part of investment security, we saw a new addition, NGN 421 billion addition, new term notes instrument. Can you please share more light on that? Finally, you declare an interim dividend of NGN 1, which is the third, I think it's the third dividend, NGN 1. What is the outlook, and why do you declare NGN 1 dividend as interim this section? What is the outlook for the final dividend? Those are my questions. Thank you, sir. Okay, thank you. I will try to remember. Interim dividend, we've always paid just NGN 1, and the reason is very simple. It's not the end of the year. We like to be left with our money to run the second half of the year. For us, an interim dividend, paying a heavy interim dividend at half year would be like ending a football match at halftime. A football match ends at full time, so at the end of the year, we'll declare the dividend. I've also said earlier on in this call that you should look at a 60% dividend payout ratio. That'll give you an idea what type of dividend you can project. On your question on fixed income again, I think I've spoken a lot about that we do expect fixed income yields to come down. We are basically going to start to change some of our asset allocation. We're going to try to pursue more loan growth, but we might not pursue it only in the corporate space. We'll do some in the corporate space, we'll do some in the SMEs space, we'll do some in the retail space. We all know, and we are planning for the fact that yields will come down, but we will try to make up the drop in yields with an increase in volume. I think those are your questions. There is one more. I said we saw a new addition of investments on the investment security part, about NGN 421 billion, the term note instrument. I said, can the management shed light on that? I already spoke about that. I said we have gone into credit-linked notes to hedge any other possible devaluation in the second half of the year. I had already spoken about them. That is that NGN 421 billion. Your credit-linked notes will ensure that if you have revaluation losses, the interest income, hopefully, on the fixed income securities will cushion any possible revaluation losses. Okay? All right. Thank you, sir. Thank you for the response. Thanks. Okay. Thank you. Next question is from Stephen Oibo, Cordros Securities Limited. Hi, good afternoon. Thank you for taking the time to answer our questions. I have two questions. The first one is on savings deposit. As a share of total deposits, savings deposit has kind of been on decline for a while now, since about Q2 2023. In Q2 of this year, we saw it only grew by 1% compared to where it closed at in 2025. My question is, do we expect to continue to see this trend? If we do, to what extent? My second question is on interest expense. We saw interest, sorry, fees and commission expense. We saw fees and commission income decline in Q2 compared to Q2 of last year. However, we saw fees and commission expense increase. I would like if you could throw more color as to why that is. Thank you. Okay, let me start with fees and commission expense. You must remember now that we have an asset management business and we have HabariPay. When you start to look at the group today, please remember that all the fees and commission expense does not relate to bank. 10%, if you look, even of the deposit base of the bank today, comes out of the wealth management business. Some of the pickup you see in fees and commission expense is coming from the other businesses and not the bank. Savings, unless I've got the information wrong or I haven't heard you right, the percentage of savings as a percentage of deposits is going down, but savings in itself is not going down. It's just not growing as fast. I think the answer is very simple. A lot of what you used to have in savings, one, you're competing with other banks who are paying higher rates, and today you're competing with fintechs. You have Moniepoint, you have OPay, you have PiggyVest. The competition for savings has become a bit more intense. Will it continue to grow? Yes. Might it grow at the same pace? Maybe not, but we're confident it will continue to grow. The competitive landscape for savings has changed, and that's what you're beginning to see. Okay, thank you. The next question is from Johannes de Bruijn, 337 Frontier Capital. Hi, Segun. Thanks for taking our calls. I just want to go back to the question about the subsidiaries. You said that a large part of the profit decline was because of the FX, but does that explain. I mean, I'm just looking at your presentation here. Côte d'Ivoire dropped by 50%, Liberia 45%, Tanzania went to losses. Is that all just the FX, or is there something else going on there? No. You see, if you strip the countries, I can explain each one. But if you take it region by region, like I said, East Africa is actually up because Rwanda is up and Kenya is up. Tanzania hasn't done as well. Uganda is up. Tanzania, we are still pushing. In terms of Côte d'Ivoire, if you look again, if you strip the income, last year, Côte d'Ivoire had this windfall, which we always knew was not sustainable, and that windfall has disappeared in 2026. A lot of what you see is core income, and we hope that by end of the year, core income would have gone up. In Liberia, we've taken some provisions. We've had a CEO change, and we've moved someone who used to be the treasurer or something in Ghana there. So if you take the individual countries, some have done better, some have done worse. But on a regional basis, what has really happened, the only one that has really come down, if you remove the exchange rates, is U.K. West Africa and East Africa are actually up without exchange rate gain. But in that basket, some countries have done better, some have done worse. Okay. Got it. Thanks for clarifying that. Just as a follow-up there- No What is the kind of medium-term strategy for these regions? Do they need capital? Do you need to do acquisitions? Can you grow? Are they at scale? Maybe just some color on your strategy there. Okay. I mean, I think that, as you will see, at 30% of group, we are pretty happy with West Africa. We think that in West Africa, we need to, which we are already doing, certain places need more branches, Ghana, Côte d'Ivoire. Like I said, to grow the core business in Côte d'Ivoire, we have had to open some branches. So I do not think we really have a capital need in West Africa or an acquisition need, and that is moving along nicely. The place where we continue to battle and we have to continue to battle is East Africa. I am not sure an acquisition is going to solve the problem. I think that East African acquisitions, when you take the valuations, are very rich. We will just have to be very patient and try to grow the business organically. We've had, and we will have, some personnel changes, and we will just have to be a bit more patient and look what happens in the next one to three years and regroup. Okay, great. Sounds good. Thank you very much. Cool. The next question is from Olumide Sole, Renaissance Capital Africa. Yes. Good afternoon. Good afternoon, Segun. Good afternoon. Thank you for taking our questions. I have just two questions. Okay. The first is for deposit growth. Yeah. The outlook was about 400% deposit growth, but for half year, we've only seen 10%. We've seen 10%. Is that outlook still plausible? Is this still achievable for full year 2026? Also, the other one is for revaluation losses. For revaluation losses, what's driving it? Is it FX gains? If it's FX appreciation, what's the outlook for that if naira appreciates further from current levels? Let me start with the second question. Like I said earlier on, the revaluation loss is basically due to the 4% appreciation in the naira, so we took a NGN 46 billion loss. I think we also learned a lesson from the first half of the year, so we've tried to hedge against the appreciation by the credit-linked note transaction, which we did, which a gentleman had asked earlier on, which is about NGN 421 billion in bills. Hopefully, the interest income we make there will cushion some of the revaluation losses. So, we are prepared for further appreciation of the naira, not necessarily bringing more losses to the P&L. You're absolutely correct. We've done 10%, but I would even To escape my guidance, it's going to be a challenge. We did guide 40%. The challenge we continue to face at the bank is our business model, which we're not ready to change. We're a low-cost producer of funds, which is why our cost of funds is 1.8%. It's much easier to grow term deposits and get a 40% and sacrifice the NIM. So, if we want to keep this NIM at about 11.8 and want to keep the cost of funds around where it is, then we're going to have to fight a bit harder than we are. I had already said truthfully earlier on, we're not only fighting with banks anymore for these deposits, we're fighting with other fintechs. It has become a lot more competitive. I wouldn't want to change my guidance at this point. I would only tell you that we're going to try to struggle and see how close we can get to the 40% by year-end. Okay. I see it is 40%. Okay. Yeah. Okay. Yep. Not 400, 40%. Yeah. 40%, yeah. Okay. Thank you. The next question is from Yemisi Sanmola, Vetiva Capital. Can you hear me? Yes. Now I- Mr. Sanmola, your line is open. Please go ahead. Maybe your line is on mute. We cannot hear you now. Can you hear me now? Yes. Now we can hear you, but you keep going away. Oh, sorry about that. Okay. Thank you very much for taking my questions. My question would be majorly on income from placements. I saw that that rose by 55%. I just wanted to know how much of that is placed with offshore investment-grade banks, and how sensitive do you think that would be to U.S. rate cuts? My second question would be on depreciation. That rose about 42%. I just wanted to know what was the major line item driving that, and do you expect that it will keep growing this fast? That also fits into my next question, which would be, how do you expect to get cost-to-income ratio down to the 30% target? Well, to be honest, let me start with cost-to-income. I don't think we're that far off. We're 31.5. What we want to go is 30. You must remember it's an equation as well. If we grow the revenues, I don't think we're doing badly on cost. Cost is only up 7%. Really, what we need to worry about is less cost, more top line. If we grow the revenues, which we're going to push, we think we can get to the 30%. You talked about depreciation. No, it's not going to continue to grow. As you can see, we did a lot of IT investment last year, which was necessary. If you're a customer of ours, you'll see that our IT is a lot more stable. That investment brought cost in terms of hardware, software infrastructure. That's what we're depreciating, and that's why the increase in depreciation. You talked about income from placements. If anything, it's the opposite. Fed rate just went up. If anything, you will have a tailwind and not a headwind. Most of those placements are with first-class AAA banks. Interest rates have gone up. If anything, we should have a slight tailwind on the foreign placements, but we will have a reduction in local placements, which are really with the central bank. Our desire is that both will cancel each other out, and we will remain about the same, but we don't expect placement income to drop. Thank you very much. The next question is from Dotun Balogun, Stanbic IBTC. Good afternoon. Can you hear me? Yes, good afternoon. My first question is on the fees and commission income. There is a line item, I think you mentioned it, but I needed more clarity in terms of what it entailed and reason for the huge decline. The commission on touchpoint commissions, if I can get more clarity on that. Secondly, what is your outlook for the Stage 3 loans, seeing that we saw a decline in the first half of the year? Sorry, could you say that again? I did not catch the second one. What is your outlook for Stage 3 loans, seeing that we saw a decline in the first half of the year? Should we expect further decline into the rest of the year? The last question is on the effective tax rate, which increased to 31%. How should we model this going forward into the year? Are you expecting the tax rate to land around the same levels by the end of the year? Thank you. Well, again, I think, let me start with the tax rate question. I have answered that. I think the only way you can bring your tax rate down today, as far as I know, I am not a tax expert, is to increase your holding of bonds, which we are doing. Since we have started to do that, what I would say is we do not expect it to be higher than 31.5%. Where it will end up, I am not sure, but with the bonds we are putting on the portfolios everywhere, there should be an improvement in tax rate by the end of the year. Stage 3 loans are not going to go up. Stage 3 loans are 4.5%. What is there is the stuff we are still carrying. We do not expect any further deterioration in the loan book. We have talked about these fees and commissions. I do not believe that what you are really seeing is a reduction in touchpoints. I think what you are beginning to see is downward pressure either in transfer fees, in other sorts of fees, but in terms of touchpoint volumes are actually going up. Yes, we had, I think, we had like a NGN 10 billion drop in commissions and fees, but I do not think, and as you have seen in the presentation, that is not down to volume. If anything, we have volume growth of 200%, 300%. The next question is from Timothy Wambu, Absa. Yeah, thank you. Just a few more questions from myself. The first one is on this very strong reversal that you report on your P&L. So there is a strong net reversal on other financial assets. Just more details on this financial asset. Is it linked to Ghana by any chance? And should we continue to expect more reversals? That is the first question. The second question is more to do with the fact that we can see your asset mix ratio is significantly de-risked. Perhaps not done a lot of customer lending. Is there a risk or concern that perhaps you have lost some market share with some of your clients? Just a thought that I am having. Is that something that might have occurred? Thank you. Okay. First one, I will let Banji answer the question on the financial assets, but I am going to answer your second one. We haven't lost market share. Like I said, and I had said it earlier on, if you cover Nigeria today, what has happened is that you have corporates who are borrowing at about 400 basis points below the one-year T-bill, as well as what was the SDF rate of 22. We made a conscious decision not to go heavily into that type of lending, because for us, that mix just doesn't work. It is not a loss in market share, it is a conscious decision not to go into a price war at 400 basis points below the government treasury. But I will let Banji answer the question on the reversal on financial assets. The reversal is because we have precautionary provisions, which we booked in previous years, which are no longer required, as we have improvement in macro. What we do is to do a reassessment on annual basis. Since we found that these provisions are no longer required, we have to reverse them on the P&L. Major one, like you know, it is investments which we have in our subsidiaries, especially in Ghana, where we have modification losses, which we have booked in previous years. But with the improvement in macroeconomic variables across all jurisdictions, especially in Ghana and Nigeria, what you see is that we have to reverse those provisions. They are no longer required, and that is what you see in that reversal on our P&L. Thank you. Okay. Is there more reversals? I am not sure. He is explaining. I am not sure there are any now, because we are taking all those. We had the Eurobond issues, we had the treasury issues in Ghana. I kind of think we have taken them all now. Okay. On the question of the fact that you are not looking to engage in a price war with corporates, they say that corporates are normally very loyal to the ones who stick with them in tough times. I am just going back to the point of maybe losing a bit of market share. Or do you think that does not happen? Do you think that the moment the prices are sensible, you are back, and the clients welcome you with open arms? Well, I do not know about open arms, but I think they will take us back if we price correctly. All right. Thank you. The last question is from Dean Tlotleng, Steyn Capital Management. Hi. I just wanted to ask just a few more questions on my end. Firstly, on your AUM growth on the fund management business, I see this across Nigeria where AUMs are growing really massively, not only for GT, but across several Nigerian banks. Could you just please let me know what some of the structural reasons are for this rapid growth in Nigeria? Secondly, you mentioned that the reason for the increase in depreciation is because of the IT spend. Could you just please remind us what exactly this infrastructure is? Was it just purely for efficiency purposes, security purposes? Could you just please just quickly remind us of that? Thank you. Okay. I will start with the IT spend. Remember, we changed our core banking application to Finacle. That in itself brought additional servers. We had to look at our infrastructure network to take this new software we had put in. So it is basically servers, communication, infrastructure, so that data, everything could go well. So it was all based around a change in core banking application. Major project, because we had used the old banking application for over 20 years. So it was a major revamp. It was definitely the right thing to do, because our old infrastructure and old GL couldn't take us any further. We had outgrown it. So that is basically what it is. Having spent the money, 2024, 2025, the depreciation has kicked in, but that is really what it was. So that is the IT spend. Nothing fancy. We are not putting millions and millions in AI or fancy things. This is just core infrastructure to run the bank. In terms of AUM growth, honestly, I cannot speak for other banks, because for us, even as a bank, we really do not have AUM, so this is our asset management business. Our growth is easy to explain. We are a low-cost operator as a bank, which means that we don't take expensive deposits. So what we are doing is, when our customers want yield, that money goes to our asset management business, so it is over 95% growth. I really can't speak for the others, but that is ours. Excellent. Thank you very much. I'm glad you're not spending on any crazy AI. No. We changed the core banking application after 20 years, so you can imagine even the guardrails to move things, and the servers, and the main GL, and everything cost quite a bit of money, but we had no choice. We had outgrown the old GL by years. In fact, we did it a bit too late, quite honestly. Okay. Understandable. Thank you very much. Thank you. Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks. Well, thank you very much. As someone rightly pointed out, we are at the end of the third quarter, so we have one quarter to go. Thank you for all those who came on the call, and thank you for all those who are investors. We continue to appreciate your business with us. Have a good day. Bye-bye.