Published On: Sun, Apr 8th, 2018

GT Bank rebases 2018 Profitability forecast

By OKEY ONYEWEAKU

 

Against the backdrop of healthier economic growth projection for the Nigerian economy in 2018, GT Bank, Nigeria’s most popular millennial banking service provider has set fresh targets for the institution going into the second quarter of the year.

With the economy expected to grow by between 2.6 and 2.8 per cent in 2018 (as against 1.92 per cent in 2017), analyst believe the banking sector generally should be a major beneficiary as manufacturers and retailers previously slow in repaying their debts find increased elbow room to grow revenues and cover short term bank liabilities. GT Bank, therefore, expect that its gross earnings in 2018 should rise to N205 billion with a loans and advances growth of about 10 per cent. The plan also plans to increase its liquidity ratio to 47 per cent or 17 per cent higher than the officially required rate of 30 per cent while the bank also hopes to keep its capital adequacy ratio at about 22 per cent. In line with an industry-wide drive to reduce operating expenses GT Bank’s managers are keen on seeing the bank’s cost-to-income ratio nestling at a comfortable 40 per cent.

Speaking to business editors in Lagos, Group Managing Director of the bank, Mr. Segun Agbaje said the projections are conservative as the bank possesses the ability to out-perform the targets.

Agbaje who noted that the economy was still fragile with a GDP growth of 1.9 per cent, explained that the year 2018 would be tough for business entities, including banks, but would still provide room for corporate growth.

GT Bank Plc climbed the back of economic recovery to grow its profit-before-tax (PBT) by 21.3 per cent to ₦200.2 billion in 2017 as investors smile to the bank with improved dividend income of N2.40 per share compared to N2.00 received in 2016. The bank had earlier declared a 30 kobo interim dividend in June 2017.

A review of GT’s 2017 financial statement shows a marginal growth in its gross earnings by 1.1 per cent to ₦419.2 billion from ₦414.6 billion in 2016; driven primarily by growth in interest income as well as e-payment revenues.

The Bank’s loan book dipped by 8 per cent from ₦1.590 trillion recorded as at December 2016 to ₦1.449 trillion in December 2017 while customer deposits increased by 3.8 per cent to ₦2.062 trillion from ₦1.986 trillion in December 2016.

The Bank’s balance sheet remained strong with a 3.9 per cent growth in Total Assets and Contingents as the Bank closed the year ended December 2017 with Total Assets and Contingents of ₦3.845 trillion and Shareholders’ Funds of ₦625.2 Billion.

In terms of Assets quality, NPL ratio increased to 7.7 per cent in December 2017 from 3.7 per cent in the contemporary period of 2016 largely as a result of classification of a single exposure within the Nigerian Telecommunications Industry.

However, non-performing loans seemed to be moderate at 4.6 per cent, which was 40 basis points below the regulatory threshold of 5 per cent. Overall, the bank’s asset quality has remained stable with adequate coverage of 119.6 per cent, with Capital adequacy remaining strong with a ratio (CAR) of 25.7 per cent (as against the regulatory threshold of 15 per cent). Equity and assets yields, Return on Average Equity (ROAE) and Return on Average Assets (ROAA) closed at 35.4 per cent and 6.2 per cent respectively.

Commenting on the financial results, the Managing Director/CEO the bank, Mr. Segun Agbaje, noted that, “2017 was a pivotal year for the bank. We delivered a strong result in a challenging environment; achieving record growth in earnings, carefully managing cost margins and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”

He further stated that “The result demonstrates the fundamental strength of our franchise as well as the progress we are making in transforming our organization into a platform on which our customers could build their businesses, connect with their own consumers and access all the resources that they need to make their lives better.”

G T Bank Plc has been consistent in demonstrating its superiority over its peers in the banking industry. The bank, in fact, has sustained its position as the highest valued banking stock. Even though, the bears have a stronghold on the market, G T bank stock is trading at 51% higher than the stock of Stanbic IBTC which is the second highest priced. The bank’s stock closed at N26.80 per share last Thursday, March 23, 2017.

As a result of its successes, many organizations have tried to model their operations after G T Bank. Its compact disposition appears to have yielded fruit.  Some believe that the bank’s management style has even generated envy among its peers. Any time there is comparison among the banks, the argument tends to favour G T Bank more. This has truly mystified its operations and brand name over the years. Interestingly, Harvard Business School in United States of America (USA) and Crainfield Business School have both conducted researches on the effectiveness and uniqueness of the G T brand.

Its modest success may have shown that quality actually pays in the long-run. This may explain the bank’s generally recognized efficiency and effectiveness. Indeed, the financial sector analysts note that the bank typically adopts fresh and unique perspectives to service evolution as exemplified by the successes of its digitization platforms.

G T Bank is one of the bluest of blue-chip companies listed on the Nigerian Stock Exchange (NSE). Many investors have earned decent returns on the banks equity. The bank has been quite generous to its shareholders in respect of both capital appreciation and dividend yields.

It paid 28kobo in 2001; 75kobo in 2002; 95kobo in 2003; 70kobo in 2004; 45kobo in 2005; 70kobo in 2006; 75kobo in 2007; 70kobo in 2008; 100kobo in 2009 and 75kobo in 2010 in addition to bonus of 1 for 4. The bank also paid 125 kobo in 2011, 155kobo in 2012, 170 kobo in 2013, 175 kobo in 2014 and 177 kobo in 2015, 200kobo in 2016 and 200k in 2017.

 

 

© 2018, Hallmarknews. All rights reserved. Reference and link to this site is required if you wish to reuse any article.

Reactions from Facebook

comments and opinions

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

  • Saraki to Nigerian youths: Turn your cellphones into business tools

    President of the Senate, Dr. Abubakar Bukola Saraki, on Sunday called on the nation’s youths to venture into entrepreneurship through their cell-phones as a way of self-employment and creating job opportunities for others. Saraki gave the charge while delivering the Fourth Convocation Lecture of the Adeleke University, Ede in the State of Osun, on Sunday. […]

  • Gov. commends Abiriba entrepreneurship drive

    From PETER OKORE, Umuahia   Historically, one of the towns that has often been associated with merchandise, entrepreneurship and self-help development efforts in Nigeria is Abiriba; a clan in Ohafia Local Government Area of Abia state. The town, popularly called, “small London” became famous for its age-long endeavours since the era of the British military expedition of Igboland,(1830-1930) in former Eastern Region of […]

  • Population crisis: Nigeria Analysts raise Alarm

    Against increasing concerns about exploding population figures, Nigerian economists, in growing numbers, are raising their voices over an impending tragedy if the current growth rate of 3 per cent per annum is not flipped back. Available data lays bare Nigeria’s romance with disaster. Recent IMF statistics puts Nigeria’s population at a stumping 199.5 million people […]

  • Shareholders bemoan Oando’s deepening crises

    –as court orders top executives to pay N245 billion By OKEY ONYENWEAKU It seems the woes of oil producing and marketing company, Oando Plc, will never end. Just smarting from the problems and controversy that almost brought the firm to its knees over book cooking, another more pernicious headache is breaking out; this time court […]

  • Top banks battle rising NPLs; 2 lose top rating

    By FELIX OLOYEDE In the face of daunting economic challenges commercial lending institutions called Systemically Important Banks or SIBs continue to lead the Nigerian financial services sector despite their struggles with high non-performing loans (NPLs) and shriniking operating margins. The Central Bank of Nigeria (CBN) in September 2014, issued a framework for SIBs, which was […]

  • Qualitative education can curb violence, insecurity, says NDIC boss

    The Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim has advocated quality education as panacea to check the spate of violence and insecurity challenges currently being experienced in the country. The NDIC Boss made the remark in an address he delivered as the Keynote Speaker at the 15th Graduation Ceremony of Zaria Academy, Shika, […]

  • China offshore oil coy to invest $3bn in Nigeria

    The China National Offshore Oil Corporation (CNOOC) is to invest an additional three billion dollars in its existing stakes in offshore oil and gas operations in Nigeria. Mr Ndu Ughamadu, the Nigeria National Petroleum Corporation (NNPC) spokesman said this in a statement on Sunday in Abuja. Ughamadu said Mr Yuan Guangyu, the Chief Executive Officer […]

  • Ecobank risk assets deteriorate as Kie bows out

    By FELIX OLOYEDE The exit of Ecobank Nigeria’s erstwhile Managing Director, Charles Kie, has raised a groundswell of speculation in the financial community as sector analysts believe that his exit was abrupt, untimely and suspicious. Over a period of two years, Kie had succeeded in reversing the banks bedraggled balance sheet and profit and loss […]

  • Blood, blood everywhere: Herdsmen, rustlers on the rampage

    –  Violence, a well-articulated plot to grab land – Expert  By AYOOLA OLAOLUWA Nigeria is gradually descending into a Hobbesian state with the growing killings in the Middle Belt, in addition to the destruction of lives and properties in the North West and Boko Haram insurgency in the North East. Defenseless citizens are being killed like […]

  • 2018 budget in jeopardy

    . Delay alone has reduced performance by 13% – Experts By UCHE CHRIS In all likelihood the 2018 budget will end like the three previous budgets of the President Buhari administration: a failure. Having been passed seven months after its presentation and half year gone; and with all the controversies surrounding its passage by the […]

  • MTN to miss market listing target

    By OKEY ONYENWEAKU A weak domestic economy in Nigeria may force telecommunications giant MTN to shift its earlier proposed August 2018 date for a local listing on the Nigerian Stock Exchange (NSE). Analysts believe that the date shift will allow the parties to the Offer plan a more successful listing arrangement that would guaranty full […]

  • APC crises deepens: Amaechi battles for relevance, Modu-Sheriff is new strongman

    By OBINNA EZUGWU Key actors in the ruling All Progressives Congress (APC) managed to keep up appearance to allow for a smooth transition at the party’s recently held national convention. Except for the exchange of blows among Imo and Delta States delegates, the convention was largely a success. But beneath the facade of orderliness, tensions […]

  • INEC declares Fayemi governor-elect in Ekiti

    The Independent National Electoral Commission (INEC) has declared Kayode Fayemi of the All Progressive Congress (APC) winner of the Ekiti Governorship Election held on Saturday. INEC’s Chief Returning Officer for the election, Professor Idowu Olayinka declared the result on Sunday. According to the Returning Officer, Kayode got 197,459 votes to defeat the Deputy Governor of […]

  • President Muhammadu Buhari said on Wednesday that Nigeria will soon sign up to a $3 trillion African free-trade agreement. Nigeria is one of Africa’s two largest economies, the other being South Africa. Buhari’s government had refused to join a continental free-trade zone established in March, on the grounds that it wishes to defend its own […]

  • PDP meets Obasanjo for advice on how to beat Buhari in 2019 polls

    The National Working Committee (NWC) of the Peoples Democratic Party(PDP) will meet with former President Olusegun Obasanjo in Abeokuta on Saturday to seek advice on how to achieve victory in the 2019 polls and beat incumbent Muhammadu Buhari. The National Chairman of PDP, Uche Secondus, made this known in Abeokuta while addressing journalists after a […]

  • GTBank Launches Social Impact Challenge, Aims to Fund Community Development Projects Nationwide

    Following more than two decades of consistent investment in community development, Guaranty Trust Bank plc is taking its Corporate Social Responsibility (CSR) another step further by launching a Social Impact Challenge that will fund dozens of innovative ideas designed and executed by members of the general public. Tagged #SimpleChangeBigImpact, the Social Impact Challenge invites individuals […]