" /> GT Bank declares windfall dividend | Hallmarknews
Published On: Mon, Apr 10th, 2017

GT Bank declares windfall dividend

 

FELIX OLOYEDE

Banking sector investors got to put smiles on their faces over the weekend as Guaranty Trust Bank, Nigeria’s largest commercial bank by market capitalization, paid out a dividend per share of N2.00. This was 13 per cent higher than its dividend payout of N1.77 in 2015, and represents a dividend yield of 8 per cent on current market price of N25.

Both Income and Value investors hemmed up by low capital gains from the Banking sector as a whole in the course of the year have gotten some reprieve from GT Banks overall performance on a year-on-year basis with capital gains (or a price increase) of 88.73 per cent (from N17 in May 2016 to N25 in April 2017) and a year-to-date (or first quarter 2017) gain of 1.21per cent.

Shareholders expressed great pleasure at the banks performance at it’s recently held Annual General Meeting (AGM) in Lagos as they poked fingers and backslapped praising the bank for paying just slightly under 50 per cent of its current earnings per share as dividends to existing stockholders. GT’s dividend payout over the last five years on a compound annual growth rate basis comes to a modest paced 6.6 per cent per annum (or 8.6 per cent per annum on a ten year basis), the fastest- in- class dividend growth rate for the sector.

Sunny Nwosu, President, Independent Shareholders Association of Nigeria, hailed the board and management of the banking for putting in a sterling performance in the 2016 financial year, in spite of a debilitating recession, saying returns on investment (ROI) in GTB has become an, ‘incredibly satisfying corporate tradition’.

“We are happy that interest income increased by 14.51 percent to N262.5 billion and the bank succeeded in reducing interest expenses by 3.17 percent to N67.09 billion,” he enthused.

He also expressed shareholders’ delight at the spread of the company’s social sustainability products, which covered education, health, agricultures, arts etc, but urged the bank’s management to intervene more in the agricultural sector.

Chief Timothy Adesiyan, chairman, Zonal Shareholders Association of Nigeria lauded the bank for its performance and interventions through sustainability products throughout the country.

GTB’s gross earnings rose by 37.4 percent to N414.6 billion in 2016 from N301.9 billion in 2015, while its Profit Before Tax surged by 36.8 percent to N165.1 billion in 2016 compared with N120.7 billion in 2015.

A sizeable chunk of the bank’s revenue came from its corporate banking division, which contributed 51.8 percent of its total earnings, the retail segment of its operations raked in 29.2 percent of earnings and commercial and SME segments brought in 12.1 percent and 4.5 percent of the revenue respectively. Public sector was the smallest contributor to the bank’s earnings in 2016, contributing 2.3 percent.

The bank’s performance was buoyed by the 1580. 05 percent rise in its foreign exchange revaluation gain to N87.29 billion in 2016 instead of the N5.2 billion in the previous year.

However, its impairment charges also ballooned to N65.29 billion during the period under review compared to N12.41 billion in 2015, indicating a whopping 426.19 percent increase.

This prompted shareholders to tasked GTB management to work hard to improve on its non-performing loans.

The bank explained that “The significant collective impairment resulted from increase in the probability of default on forex denominated usance facilities due to marked depreciation of the naira against the dollars. Of the total collective impairment charge of the N50.64 billion, the sum of N40.46 billion resulted from such facilities.”

Segun Agbaje,  GTBank’s Managing Director, explained that the bank is fulfilling its mandate to always add value to investors’ funds.

“We promise to add value to your stocks, which is why there is an appreciation in the dividend paid compared to that of last year,” he further stated.

He added that the company was in no competition with any other bank on dividend payment, adding that the bank made enough money to give more dividends, but decided to ply it back into its reserves as retained earnings.

The bank boss also noted GTB’s performance in 2016 did not only reflect the resilience of the company’s franchise, but demonstrated the fundamental strength of its businesses to deliver sustainable long-term growth.

Looking ahead, Agbaje noted that although the challenges in the macroeconomic environment were likely to persist, the bank’s commitment to staying positive, delivering exceptional financial services to its customers, and adding value to all stakeholders has never been stronger.

“With the repositioning of our business structures and significant investment in our digital abilities, we are confident in our capability to deliver differentiated products and services to our customers whilst enhancing cost-efficiency and reducing risk,” he said.

According to him, GTB would continue to focus on strengthening these relationships in order to ensure long-term franchise value and deliver sustainable returns to our shareholders.

The CEO asserted, “This strategy which has served us well in the past and is serving returns to our shareholders, we believe, will continue to serve us well into the future.”

Mrs Osaretin Demuren, Chairman, GTB board of directors said, “In spite of the stiff competition posed by attractive yield curve on treasury bills, customers’ deposits grew by 23.3 percent from N1.61 trillion in 2015 to N1.99 trillion in 2016. We also maintained our position as the most efficient bank in Nigeria by recording a Cost to Income Ratio (CIR) of 40.8 per cent in 2016.”

She said though the year ahead is clouded with challenges and uncertainties with regards to the political, regulatory, and economic and business environment, the bank is optimistic that it has a strong foundation and excellent franchise to give value to its customers.

GTB is currently the most capitalized bank in the Nigerian Stock Exchange with N735.8 billion capitalization of the total N1.9 trillion of the banking sector capitalization of the entities market.

The bank closed the week at a market price of N25 per share reflecting its sustained superior operating performance making it the most highly priced bank on the floor of the Nigerian Stock Exchange (NSE), thus explaining why shareholders were more than satisfied with the banks management and could afford a few racy congratulatory remarks despite the dim weather which in a way mirrored the gloom in the broad economy.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Recent posts

  • Time is ripe for rates cut, says Rewane as inflation slows further in Oct.

    FELIX OLOYEDE This is the appropriate time for the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to cut benchmark monetary rates after inflation rate slows down for the ninth consecutive time in October, said Mr Bismarck Rewane, Managing Director, Financial Derivatives. The National Bureau of Statistics on Tuesday released Consumer Price […]

  • ELAN National Lease Conference Focuses on Revamping Nigerian Economy

    FELIX OLOYEDE In furtherance of its objective of promoting the business of leasing in Nigeria, Equipment Leasing Association of Nigeria (ELAN) has concluded plans to organise the 15th Annual National Lease Conference with focus on revamping the Nigerian economy. The conference which is the biggest gathering of stakeholders in the leasing industry is expected to […]

  • Nigeria-centric restaurant, Labule, opens new outlet in Lagos

    Labule, Nigeria-centric restaurant, operated by an indigenous company, Roots Foods Limited, offering real Nigerian local delicacies in a unique environment that combines the setting of a modern quick service restaurant with that of an African setting of a local ‘buka’, has opened a new outlet on Admiralty Road in Lekki Phase 1, Lagos. The brand […]

  • Nigerian banks shine in Ghana

    By JOHNMARK UKOKO Nigerian banks have been credited with “revolutionizing “the banking sector in Ghana, due to the many innovations they brought to Ghana’s banking sector. The Ghana Deputy Minister of Trade and Investment Hon. Carlos Kingsley Ahenkorah said in Lagos that the innovation and transformation of the Ghana’s banking sector is credited to the […]

  • Ajimobi moves to save Oyo APC from disintegration

    By OLUSESAN LAOYE The seeming crisis in Oyo APC has now forced the Governor of the state, Abiola Ajimobi, to begin consultations with stakeholders to convinced members on why they must come together as a body to face the 2019 general elections, Although the internal crisis is yet to break open as the aggrieved party […]

  • YolaDisCo sale stalled as no potential buyers emerge

    By ADEBAYO OBAJEMU Two years after the core investors of the Yola Electricity Distribution Company, YolaDisCo, declared a force majeure owing to their inability to operate under the reign of terror unleased by Boko Haram, the Federal Government is yet to find any investor interested in operating the utility company, it has been learnt. In […]

  • Company Analysis: Much Ado about Seplat

      By TESLIM SHITA-BEY The oil and gas sector has had a bumpy since the beginning of 2017 with local oil major, Seplat, seeing its financials whipped raw by prior year liabilities despite rising revenues over the nine months (9M). The company in the last two years has moved from being distinctively bad to singularly […]

  • How to start a photography business

    By ZUBAIR DANIE While photography could be accounted for as a full blown course in any offering institution of learning for professionalism, the field equally provides a platform for individuals whose passion it is to project images as a form of livelihood. The socio-cultural aspect of Nigerians that play host of events like: wedding, naming, […]

  • BOFE to celebrate unsung heroes in local communities

    OluwasolaJesuseitan, a brand and advertising expert, is an advocate of sustainable brand communications. He is also the founder, Business Owners Forum Enterprise (BOFE), a non-profit making organization, which seeks to build the capacity of business owners in and around Akute, Ogun State. He tells FELIX OLOYEDE in this interview of his organization is promoting business […]

  • Lager wars: Who wins?

    By JOHNMARK UKOKO Nigeria has many lager beer producing companies, some have been in existence for over 50 years while others are quite new in existence in the country. Some of these companies that have over the years churned out millions, if not billions of bottles of beer to Nigerian drinkers are: Nigeria Breweries Plc, […]

  • Nestle sparkles in Q3 results

    By OKEY ONYENWEAKU As the packaged Consumer goods (PCG) sector struggles to stay ahead of falling consumer demand, companies such as Nestle Nigeria plc are bucking the trend of businesses with shrinking bottom lines. Indeed the multi-product packaged goods producer has seen earnings rise to mind boggling with its pre-tax profit rising by a stunning […]

  • 2018 Budget proposals renew old anxieties

          FELIX OLOYEDE   Mixed reactions trailed the presentation of the 2018 federal government budget by President Muhammadu Buhari to the National Assembly (NASS) last week. Public policy analysts have expressed moods from the congenially positive to the outright incredulous. The staggering N8.6 trillion expenditure plan is one of the most audacious in […]

  • Anambra 2017: Obiano battles for life

    By Obinna Ezugwu The time has finally arrived. On Saturday the people of Anambra State will head to the polls to either renew the mandate of the incumbent state governor, Chief Willie Obiano who is running for a second term in office, or elect fresh hands from among other prominent contenders, including Mr. Oseloka Obaze […]

  • (Editorial) CBN’s BVN distraction and matters arising

    Nigeria’s fiscal and monetary authorities have a frustrating way of responding to the seizure of private assets; they typically gloat with glazed eyes over private citizen’s money ready to pounce on the cash like a pack of hyenas starved witless. The recent order by the Central Bank of Nigeria that customer accounts that are not […]

  • 12 Yoga tips for beginners

    The popularity of yoga has soared in the last decades, and it seems that every other friend and acquaintance of ours is already practicing it. But don’t let it fool you into thinking it is easy: yoga is quite challenging, especially for beginners. The good news is that there are some practical tips to make […]

  • Finally, embattled IGP, Ibrahim Idris, appears before Senate

    The Inspector General of Police, Ibrahim Idris, has arrived before the Senate ad hoc committee set up to investigate the allegations and counter-allegations between him and Senator Isa Misau. The IGP was accompanied by his lawyer, Alex Iziyon (SAN) and Special Assistant to the President on National Assembly Matters (Senate), Senator Ita Enang.   Details […]


Visit us on Google+