" />
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

  • CBN ruins Black Market business, says Gwadabe

    Central Bank of Nigeria (CBN’s) foreign exchange management policies have begun to put severe pressure on Nigeria’s parallel foreign currency market as ‘Black marketers’ begin to see their trading margins disappear. Indeed with more stable supply of forex and growing investor confidence on rising oil prices (currently at $74 per barrel) , the business of […]

  • Manufacturers groan despite improved bank liquidity

    By FELIX OLOYEDE Nigerian manufacturers are still credit-starved despite the improved liquidity of the banking sector. Although credit to the private sector has been rising, manufacturers have claimed that access to funds still pose a serious problem. Broad money in circulation increased 8.14 per cent to N2, 401.91 trillion in February 2018 compared to N2, […]

  • MAN, LCCI disagree over CFTA

    By UCHE CHRIS President Buhari seems to be coming under increasing pressure from both home and abroad over his refusal to sign the Continental Free Trade Area treaty last month at the meeting African Union Heads of states and government in Addis Ababa, Ethiopia. Also Nigerians particularly the business community are sharply divided over the […]

  • Gov. Wike: More garlands for Mr. Projects

    By OBINNA EZUGWU On Sunday April 15, 2018 at the Civic Centre, Victoria Island, Lagos, Rivers State governor, Nyesom Wike was the cynosure of all eyes as he stood firm and composed to the cheering of the audience at the capacity hall to receive the prestigious Zik Prize for good governance. It was indeed an […]

  • The Sterling Bank spreadsheet… an uppity lenders burden

    By TESLIM SHITTA-BEY Despite not stirring excitement in recent years, Sterling Bank Plc has run a recession gauntlet and come out looking marvelous. The bank in 2017 grew its gross earnings by slightly under twenty per cent to 19.79 per cent between 2016 and 2017.  The banks gross earnings (a measure of its business volume) […]

  • Melaye released after being detained, police deny involvement

    Kogi West senator, Dino Melaye has been released from detention reports reaching Business Hallmark indicate. The Senator was released after being detained by officials of the immigration service at the Nnamdi Azikiwe International Airport, Abuja on his way to Morocco The officials allege that he was detained based on an order from Interpol. However, the […]

  • Breaking: Senator Dino Melaye arrested at Abuja airport

      Senator Dino Melaye on Monday morning arrested after checking in at the international wing of the Nnamdi Azikiwe Airport, Abuja. The embattled senator representing Kogi West on the platform of the APC, tweeted that he was picked up on his way to Morocco for an official engagement sponsored by the Nigerian government. Melaye was […]

  • Big Brother Naija 2018: Miracle claims N25m cash prize, brand new SUV

    Miracle Ikechukwu Igbokwe has emerged the winner of Big Brother Nigeria #BBNaija, reality show. Miracle beats one of the most controversial housemates, Cee-C to win the ultimate grand prize of N25million cash, a brand new SUV among other prizes. Miracle is a young pilot and also a model. A total of 170 million votes were […]

  • Economy: Nigeria receives massive vote of confidence – Adeosun

    …We will continue to build reserves and save for the rainy day – Emefiele From OKEY ONYENWEAKU, Washington D.C, USA Minister of Finance, Kemi Adeosun Saturday in Washington D.C, USA said Nigeria has been praised for her good economic outlook.  Speaking to Journalists during a combined briefing with the Governor, Central Bank of Nigeria, Mr. […]

  • Nigeria-US Investment Summit not included in our schedule, says Adeosun, Emefiele

    The Minister of Finance, Kemi Adeosun and the governor of the Central Bank of Nigeria, Godwin Emefiele, have explained the reasons why they were absent at the Nigeria-Us Investors Summit which was held in Washington, DC on Saturday. The summit is organised by the Embassy of Nigeria in the United State and the absence of […]

  • Nigerian banks must grow risk-weighted assets to remain competitive, says Coronation Merchant Bank report

    FELIX OLOYEDE Ability to create risk asset creation in the real sector would set apart leaders of the Nigerian banking industry over the next three years, a new report from Coronation Research, a part of Coronation Merchant Bank Group has stated. The report released last week claimed that while the quality of asset in the […]

  • Nigerian equities market sheds 0.28%

    The equities market closed negative last week as Nigerian Stock Exchange All-Share Index (NSE ASI) dropped by 0.28 per cent to 40,814.89 basis points. Similarly, all other indices finished lower with the exception of NSE Consumer Goods, NSE Premium, NSE-Main Board, NSE 30, NSE Banking, NSE Oil/Gas, and NSE Pension indices, which appreciated by 1.08 […]

  • SEC expresses worry over spate of delisting companies

    FELIX OLOYEDE The spate of highly capitalised companies delisting from the Nigerian Stock Exchange (NSE) calls for some concern, the Securities and Exchange Commission (SEC) has stated. The Acting Director General, Ms. Mary Uduk, while briefing pressmen on the outcome of the first Capital Market Committee (CMC) in 2018 on Friday, noted that this trend […]

  • Borno Mosque Attack: Four killed, eight injured Sunday morning

    Four people have been killed and eight others injured in a suicide attack on a mosque in Bama Local Government Council, Borno state. The State Emergency Managment Agency (SEMA) chairman, Yabawa Kolo, confirmed the death toll on Channels Television. The incident occurred when two suicide bombers, a male and female between the ages of  13 and 14 invaded […]

  • Buhari returns to Abuja from London

    President Muhammadu Buhari has returned to Abuja after his visit to the United Kingdom, where he held bilateral talks on Nigeria – British relations and also participated in the Commonwealth Heads of Government Meeting ( CHOGM). The President on April 9 left Abuja for London after he announced his intention to seek re-election in the […]

  • World Bank jacks up share capital by $13 billion

    World Bank shareholders have approved an increase in the bank’s lending capacity  after the United States backed a reform package that curbs loans and charges more for higher income countries like China. World Bank President Jim Yong Kim said neither China nor any middle income countries was happy about the prospect of paying more for […]