Thank you for quick reply!
The problem is I'm running the server myself and it seems the gd module is installed as seen below
gd
GD Support enabled
GD Version bundled (2.0.28 compatible)
FreeType Support enabled
FreeType Linkage with freetype
FreeType Version 2.1.9
T1Lib Support enabled
GIF Read Support enabled
GIF Create Support enabled
JPG Support enabled
PNG Support enabled
WBMP Support enabled
XBM Support enabled