" />
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>

Most Shared

Recent posts

  • Oil prices fall as Saudis await supply boost

    Global oil prices fell Friday after top producer Saudi Arabia signalled a likely boost in supply as soon as the third quarter, and world stock markets were mixed over the sudden US move to cancel the summit with North Korea. Saudi oil minister Khaled al-Faleh said at an economic conference in Russia that a gradual […]

  • 2018 Budget:Presidency receives Appropriation Bill from National Assembly

    The Presidency has received the 2018 Appropriation Bill from the National Assembly. The President’s liaison officer to the National Assembly, Senator Ita Enang confirmed that he received the budget from the legislature on Friday and that the consideration of the budget by the President would follow. Senate President Bukola Saraki had told State House correspondents […]

  • No plan to suppress female participation in politics-Buhari

    President Muhammadu Buhari on Friday there is no deliberate attempt or plan to suppress female participation in the nation’s governance or politics. President Buhari who said this while receiving female parliamentarians from across the states of the federation at the Presidential Villa, noted that men are not aggressive as wrongly perceived by some female political office […]

  • U.S. stocks drop as Trump cancels North Korea meeting

    U.S. stocks dropped on Thursday after President Donald Trump cancelled a planned summit with North Korean leader Kim Jong Un, while a slide in oil prices and bank stocks also weighed as investors grappled with fresh U.S. protectionist plans. Trump said he cancelled a June 12 summit “based on the tremendous anger and open hostility” […]

  • Buhari will receive 2018 Budget on Friday, says Saraki

    Senate President Bukola Saraki has promised that the 2018 Appropriation Bill will be presented to President Muhammadu Buhari on Friday. Dr Saraki said this on Thursday when he led members of the National Assembly to the State House to break the day’s fast with President Buhari. According to the Senate President, the delay in presenting […]

  • Zenith Bank shares depreciates by 95k

    Zenith Bank plc shares on Thursday at the Nigerian Stock Exchange (NSE) depreciated by 95k to close at N27, The News Agency of Nigeria (NAN) reports. Flour Mills trailed with a loss of N1.40 to close at N31, while Cement Company of Northern Nigeria declined by N1.20 to close at N24 per share. Dangote Sugar […]

  • Peace Corps bill dead finally

    The controversial Nigerian Peace Corps bill has finally been jettisoned as an attempt by the House of Representatives to override President Muhammadu Buhari failed on Thursday. The House of Representatives which boasted it would override the veto of the Buhari could not achieve its aim. The bill seeks to turn the Peace Corps, currently a […]

  • NNPC sets 30% retail market by 2020

    The Nigerian National Petroleum Corporation, NNPC, has directed its downstream subsidiary, NNPC Retail Limited, to ensure it grow its market share of petroleum products distribution in the country to 30 per cent by 2020 It also plans to expand its presence to other neighbouring states in the West African sub-region. In a statement in Abuja, […]

  • Reduction in oil production slows Nigeria’s economy

    Nigeria’s economy grew slower than expected in the first quarter, official statistics showed Monday, with an expansion in oil production offset by a sputtering non-oil sector. The economy grew by 1.9 percent year-on-year in the three months to March, compared with growth of 2.1 percent in the fourth quarter of 2017, said Nigeria’s National Bureau […]

  • Lagos set date to launch Embedded Power Supply Project

    The Lagos State Government has revealed plans to launch the Embedded Power Supply Project come July 2018. The power project is targeted at generating 3,000 megawatts of electricity for the state within the next 3-5 years. This was disclosed on Wednesday by the Commissioner for Energy, Mr. Olawale Oluwo,  in Alausa. He said the project […]

  • ‘Buhari yet to receive passed 2018 budget’

    President Muhammadu Buhari is yet to receive the 2018 budget, one week after it was passed by the National Assembly. The Minister of Budget and National Planning, Udoma Udo Udoma disclosed this at the Federal Executive Council meeting on Wednesday while responding to questions from journalists. The Minster said reports credited to him as saying […]

  • New CIBN president tasks banks on risk management, corporate governance   

    FELIX OLOYEDE Financial institutions in the country have to device strategies to address the issue of poor risk management and corporate governance practices, knowledge gaps in critical core banking functions and non-adherence, which are posing serious challenge to financial industry, said Dr. Uche Olowu, the newly sworn-in President and Chairman of council, the Chartered Institute […]

  • Catholics in nationwide protest against incessant killings

    …Lagos Govt snubs protesters FELIX OLOYEDE Catholic adherents took to the streets across the country to protest the incessant killings taking place in different parts of Nigeria. The nationwide protest coincided with the burial of two Catholic Priests and 17 parishioners, who were killed during a mass in Benue on April 24, 2018. In Lagos, […]

  • Awka Summit fallout: Ndigbo demands new constitution (Read full text)

    Full text of the speech delivered on the occasion of Igbo Summit on Restructuring held at the Ekwueme Square, Awka, Anambra State on Monday 21 May 2018. *Restructuring The Nigerian Federation: The Position of Ndi Igbo* *”Nigeria: A Ga Akpa ya Akpa!”* *EKWUEME DECLARATION 2018* 1. PREAMBLE: The Nigerian project is at crossroads. It does […]

  • Nigeria’s GDP rises 1.95%, non-oil sector accounts for 90.3%

    The oil sector’s contribution to Nigeria’s Gross Domestic Product, GDP remains below 10 per cent in Q1 figures of the nation’s GDP released by the National Bureau of Statistics in Abuja today. According to the NBS, the nation’s GDP grew by 1.95 per cent year-on-year- in real terms in the first quarter of 2018. Although […]

  • National healthcare delivery threatened as sector’s crises worsen

    . JOHESU strike is sheer blackmail – NMA  By BAYO OBAJEMU These are troubling times for the health sector beset by the panoply of problems, some of them of long-standing nature while others are offshoots of long years of neglect by the authorities. But the spectre of war drums that hovers over the sector now […]