Habari Pay’s profits demonstrate GTCO’s bet on retail banking

Habari Pay’s profits demonstrate GTCO’s bet on retail banking

According to GTCO’s half-year financial statements, Habari Pay reported a profit of ₦1.3 billion after tax. A breakdown of GTCO’s operating segments shows retail banking is its second-biggest revenue-generating segment.

Habari Pay, the fintech subsidiary of Guaranty Trust Holding Company (GTCO), has seen a significant surge in profits, reporting a ₦1.3 billion after-tax profit for the first half of 2023, marking a 312% increase from the previous year. This impressive growth demonstrates the increasing adoption of GTCO's digital payment services.

GTCO initially launched Habari in 2018 as a super-app offering various services. However, it shifted its focus to digital payments in 2020, making Habari a separate company fully owned by the bank. Habari Pay's flagship product, Squad, combines a payment gateway and e-commerce platform with a Point-of-Sale business.

Despite facing competition from established payment providers like eTranzact and Moniepoint, Habari Pay has continued to thrive. In 2022, it reported a ₦836 million after-tax profit. The Nigerian digital payments market is also growing rapidly, with transaction values projected to reach ₦580 billion by the end of the year.

In terms of revenue, retail banking is the second-largest segment for GTCO, generating ₦72.8 billion, representing 20.5% of the total revenue. GTCO's corporate banking segment remains the top revenue generator at ₦118.5 billion. Both segments have recorded healthy profits, with corporate banking reporting ₦47.9 billion in after-tax profit, and retail banking recording ₦19.1 billion.

As the retail banking market becomes increasingly competitive, GTCO is expected to leverage its market presence to compete with other large banks and fintech players, including Palmpay, Kuda, and Fairmoney. The entrance of Moniepoint (formerly TeamApt) into the retail banking sector is expected to intensify the competition further.

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