Published On: Fri, Apr 1st, 2016

GTBank set to open additional subsidiary


…targets N125bn profit in 2016

Despite the discomforting macro-economic condition of the nation, G  T said it has put all processes in place to open a new subsidiary in Africa in the new year.

The bank also unveiled an ambitious profit target of N125bn in the 2016 financial year.

The bank reported N120.7bn and N116.4bn profit before tax in the 2015 and 2014 financial year, respectively.

The Managing Director, GTB, Mr. Segun Agbaje, said in a press conference in Lagos that the lender was targeting 25 per cent return on investment this year.

According to him, the bank will grow the risk assets of its institutional banking business and will still maintain a Non-Performing Loan ratio that is within the regulatory limit of five per cent.

Agbaje also said it would keep its cost-to-income ratio below 45 per cent and leverage technology to keep its cost low.

“We will increase our subsidiaries’ contribution to the group’s PBT and focus on optimising revenue and minimising cost of all subsidiaries,” he said.

As part of the lender’s commitment to growing retail and the small and medium scale businesses, Agbaje said the bank would lower cost of funds and maintain margins.

In the 2015 financial year, GTBank’s subsidiaries contributed eight per cent to its loan book; 11.7 per cent to its total deposits and 6.9 per cent to its PBT.

In the last financial year, the lender’s interest income was N229.2bn while its non-interest income was N72.6bn.

It also recorded 8.4 per cent in gross earnings and 3.7 per cent in the PBT.

Highlighting reasons for the performance, Agbaje said, “Growth of 8.4 per cent in gross earnings for FY 2015. This growth was in spite of the tepid system liquidity that characterised the first nine months of the year, FX scarcity as well as the lull in economic activities in the fourth quarter of 2015.

“Revenue growth mainly attributable to 28.6bn increase in interest income, compared to the growth of 15.2bn in FY 2014 due to efficient balance sheet management and growth in other fee lines. The decline of 6.8 per cent (5.3bn) in non-interest revenue due to one-off gains from disposal of long-term investment in 2014 and decline in forex earnings as a result of relative stability of naira in 2015.

“There was a seven per cent devaluation in 2015 compared to 16 per cent in 2014. Best in class shareholders return and asset deployment as post-tax ROaE and ROaA closed at 25.6 per cent and 4.1 per cent, respectively.

The GTBank MD said the increase in interest income was mainly driven by 7.5 per cent growth in loan book.

This, he said, was enhanced by change in risk assets portfolio mix in favour of the higher margin naira loans versus the United States dollar loans.

“This resulted to improved asset yield from 11.66 per cent in 2014 to 12.48 per cent in 2015. Fee and commission income grew by ₦3.9bn (8.1 per cent) inspite of the 21 per cent decline in the COT income, he explained adding, “Other income comprising gains on disposal of long-term investments, forex earnings and dividend income declined by 52 per cent to ₦8.5bn from ₦17.9bn in Dec.2014.

The decline is attributable to gains from disposal of long-term investment in 2014 and stable exchange rate in 2015.”

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