GTCO’s HabariPay Sees Profit Surge 30.7% as Nigeria's Fintech Market Heats Up

06 Oct 2024

Guaranty Trust Holding Company’s (GTCO) fintech subsidiary, HabariPay, has posted a notable 30.7% increase in profit for the first half of 2024, signaling the continued momentum of digital payments in Nigeria’s burgeoning fintech landscape. With a profit after tax of ₦1.7 billion, up from ₦1.3 billion in the same period last year, the company’s growth reflects both an expanding user base and the increasing importance of digital financial solutions in the region.

The financial results underscore HabariPay’s expanding role within GTCO’s broader digital strategy. Since its launch as part of GTCO’s restructuring from a commercial bank to a holding company, HabariPay has emerged as a key player in the payments sector, further solidifying its presence with offerings like Squad, a hybrid payment gateway and e-commerce platform. The subsidiary generated ₦2.06 billion from core business activities in the first half of 2024, representing an explosive 815.6% increase from the ₦225 million reported in the same period last year.

Riding the Digital Wave

HabariPay’s success comes as Nigeria’s fintech sector witnesses significant growth, driven by rising demand for digital payment solutions amid increasing smartphone penetration and a youthful, tech-savvy population. Companies like Flutterwave and Paystack have led the charge, but HabariPay, backed by the financial clout of one of Nigeria’s largest banks, is quickly rising to challenge established players.

The company’s robust growth is tied not only to the success of its flagship Squad platform but also to its integration within the broader Habari ecosystem. The all-in-one platform allows users to shop, pay bills, and consume entertainment, offering a glimpse into GTCO’s vision of a lifestyle-driven financial ecosystem.

Operating income at HabariPay increased by 22.7% to ₦2.7 billion in the first half of 2024, up from ₦2.2 billion in the same period last year, signaling a strong revenue foundation. While operating expenses climbed slightly to ₦703 million, up from ₦688 million, the company’s lean cost structure, coupled with high revenue growth, has kept margins healthy.

Fintech, Innovation, and Market Positioning

GTCO’s pivot to fintech with HabariPay is emblematic of a broader trend among Nigerian banks seeking to leverage their brand trust and financial backing to gain a competitive edge in the payments sector. By establishing HabariPay as a standalone business, GTCO is positioning itself to capitalize on the growing importance of financial inclusion in Nigeria, where over 55% of the population remains unbanked or underbanked.

HabariPay’s efforts to foster innovation were on full display with its recently launched “Take on Squad Hackathon 1.0,” a coding sprint designed to engage young developers and innovators. The event, held at the GTCO Training Complex in Ogun State, reflects the company's strategy of tapping into Nigeria's youth talent to drive growth.

However, competition remains fierce. With fintech startups such as Opay, Kuda, and others aggressively expanding, traditional banks turned fintech operators like HabariPay face a balancing act of leveraging their scale while remaining nimble enough to attract a tech-first audience. Yet, GTCO’s established reputation and network may give HabariPay an edge in acquiring market share across both individual consumers and small businesses.

Future Prospects

As Nigeria’s fintech market continues to grow, with digital payments expected to surpass $20 billion by 2025, HabariPay is well-positioned to expand its reach. Its integration with GTCO’s banking services provides a solid foundation to scale, but the fintech will need to continue innovating to keep pace with fast-moving competitors.

The coming months will be crucial for HabariPay as it seeks to further entrench itself in Nigeria’s competitive fintech sector. If the first half of 2024 is any indication, the subsidiary has the potential to become a formidable player in Nigeria’s digital financial ecosystem.

For GTCO, the success of HabariPay represents a vindication of its decision to embrace digital transformation. The next challenge will be ensuring that the fintech subsidiary’s growth remains sustainable, especially as Nigeria's regulatory environment and market dynamics continue to evolve.

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