At 27.86%, GTCO Leads Banking Sector with Lowest Cost-to-Income Ratio
Kayode Tokede
Despite regulatory costs and high inflation that remain key drivers of growth in operating expenses, Guaranty Trust Holdings Company Plc (GTCO), recorded the lowest Cost-to-Income Ratio (CIR) in the 2025 financial year.
As against nine other Deposit Money Banks (DMBs) analysed by THISDAY, GTCO recorded Cost-to-Income Ratio of 27.86 per cent from 24.14 per cent reported in 2024.
The DMBs investigated are: Fidelity Bank Plc, Stanbic IBTC Holdings Plc, Wema Bank Plc
Sterling Financial Holdings Company Plc, and Jaiz Bank Plc.
Others include: Access Holdings Plc, First Holdco Plc, United Bank for Africa Plc and Zenith Bank Plc.
CIR is important for determining the profitability of a bank and it gives a clear view of how efficiently the bank is being run. The lower the ratio, the more profitable the bank.
In the banking sector, CIR is a critical indicator of operational efficiency. A lower CIR can reflect better cost management, higher productivity, or both. However, it should be analysed alongside other metrics like Return on Equity (ROE) and Net Interest Margin (NIM) for a holistic assessment.
For banks, an ideal CIR is typically between 40 per cent and 60 per cent, though this can vary based on the industry and geographic region.
Inflation in key African economies where most of these DMBs operate remained generally moderate toward the end of 2025.
Kenya’s inflation held at 4.5 per cent, 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 per cent, its lowest level since 2022.
Nigeria’s headline inflation rate eased significantly to 15.15 per cent in December 2025, from above 30 per cent 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 MPR was held at 27.50 per cent before a slight cut to 27 per cent 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 per cent in 2022, one of the highest in over 10 years.
However, GTCO in 2025 reported N475.4 billion operating expenses (OPEX), about 17.9 per cent increase over N403.0 billion in 2024, with non-controllable cost mix increasing to 16.3 per cent of the total operating expenses in 2025 from 14.5per cent in 2024. Operating income closed 2025 at N4.09 trillion, about 31.05per cent increase over N312 trillion in 2024.
“Improved operating metrics, with declining cost-to-income ratio and expanding returns, reflecting broader ecosystem efficiency gains and platform scalability,” the lender explained.
GTCO also led the banking sector with Return on average equity of 70.2 power cent in 2025 from 48.2 per cent in 2024.
The lender in the period under review emerged as the second most profitable bank after Zenith Bank, reporting N1.23 trillion profit before tax in 2025.
Similarly, other Tier-I and II banks investigated by THISDAY recorded CIR below 70 per cent in the period under review.
Data compiled by THISDAY showed that Sterling Financial Holdings Company posted CIR of 63 per cent in 2025 from 72 per cent in 2024, the highest of the investigated 10 DMBs.
Stanbic IBTC Holdings declared 36.80 per cent CIR in 2025 from 37.70 per cent in 2024, while Zenith Bank posted 45.20 per cent CIR in 2025 from 38.90 per cent in 2024.
Zenith Bank in a statement said, “The group’s cost‑to‑income ratio increased to 45.2 per cent, stemming from an increase in impairment charge and sustained inflationary pressure..”
Other banks with Cost-to-Income Ratio below 60 per cent threshold were Fidelity Bank at 54.60 per cent in 2025 from 42.90 per cent in 2024, while UBA declared CIR of 59.40 per cent in 2025 from 49.50 per cent in 2024.
Commenting, the Vice President, Highcap Securities Limited, Mr. David Adnori stated that the ratio measures the efficiency of a bank 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 resilience amid macroeconomy challenges.
On his part, Financial Analyst and Chief Research Officer, InvestData Consulting Limited, Mr. Omordion Ambrose added that the ratio measures the efficiency of a bank adding that it is important for banks to cut expenses so as to generate more profit.
