… to leverage on 21m customer base
By Okey Onyenweaku |
Day after day, week after week, GTBank is engrossed in a fight. The leading financial services player is busy fashioning out the best way not only to service its customers but also to increase shareholder value for investors. This time, the latest push has to do with the most capitalized bank on the Nigerian Stock Exchange (NSE) embracing the more open-ended Holding Company structure.
According to Mr. Segun Agbaje, the Managing Director of GT Bank it is clearly the imperative of diversification that is leading the bank on to transiting to a Holdco structure.
According to experts, the holding company structure helps firms not only to protect their assets against the threat of concentrated volatility but to also reduce risks overall.
In a recent briefing session with top journalists, Agbaje who disclosed that the bank has already secured the Central Bank of Nigeria’s nod to restructure into a holding company said the new entity would leverage on its solid 21 million customer base to compete even more profitably in the industry.
He said the entity’s current target was to soon be number 5 in Africa in terms of profit.
According to him, the bank which already occupies the Number 8 position in Africa by profit would be focusing on the deployment of the right technology; fighting for market share and unlocking more value for shareholders.
‘’We will delist GT bank from the NSE and list the holding company with its shareholders intact,’’ he underscored.
Agbaje who noted that most leading banks today are holding companies said the new entity will not only compete with fintechs but also explore the huge opportunities in the SMEs field, which in his view have barely been scratched.
Pushing back against a worsening economic recession, GT Bank which is also Nigeria’s most highly capitalised financial institution has managed to sustain strong operating earnings.
The 3rd Quarter results for example show improved performance across key financial metrics, reaffirming the Bank’s capability to navigate the current economic challenges occasioned by the impact of COVID 19 on the world economy, and analysts say, the performance reflects its position as one of the leading and best managed financial institutions in Africa.
Broken down, the Group reported a Profit before tax of ₦167.4billion, representing a decrease of 1.9% over the ₦170.7billion recorded in the corresponding period of September 2019 and an improvement on the 5.2% dip posted in H1-2020, and relative to H1-2019. Its loan and Deposit book however grew by 4.5% and 25.1% from the ₦1.502trillion and ₦2.640trillion recorded as at December 2019 to ₦1.569trillion and ₦3.303trillion in September 2020 respectively.
Still on its fundamentals, Guaranty Trust Bank’s Balance sheet remained well structured, diversified and resilient with Total assets and Shareholders’ Funds closing at ₦4.574trillion and ₦755.5billion respectively. Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 23.9%, while Asset quality was sustained even as NPL ratio and Cost of Risk (COR) closed at 6.5% and 0.6% in September 2020, compared with 6.5% and 0.3% in December 2019 respectively.
Commenting on the financial results, the Managing Director/CEO of Guaranty Trust Bank Plc, Mr. Segun Agbaje, said; “Our 3rd Quarter result is a reflection of how we have appropriately positioned our balance sheet to cope with current economic realities and the challenging business environment. It is also a testament to the enduring loyalty of our customers, the hard work and dedication of our staff and the unwavering support we continue to enjoy from all of our stakeholders in our drive to deliver best-in-class financial services and superior and sustainable returns.”
He further stated that; “As an organization, we will continue to build on our commitment to enriching lives by leveraging our digital-first customer-centric strategy to improve customer experience and maintain a high standard in service delivery, and going beyond banking to create and drive innovative financial solutions that add value to our customers in all aspects of their lives.”
Overall, Guaranty Trust Bank Plc continues to come across as still the best performer in the Nigerian banking industry in terms of critical financial ratios i.e. Post-Tax Return on Equity (ROAE) of 26.3%, Post-Tax Return on Assets (ROAA) of 4.6%, and Cost to Income ratio of 40.2%.
Renowned for its forward-thinking approach to financial services and customer engagement, GTBank was recently ranked Africa’s Most Admired Finance Brand in the 10th-anniversary rankings of Brand Africa 100: Africa’s Best Brands, the pre-eminent survey and ranking of the Top 100 admired brands in Africa. The Bank was also awarded the Best Bank in Nigeria by Euromoney Magazine for a record-extending tenth time and the Euromoney Excellence in Leadership Africa Award for its swift reaction in responding to the Covid-19 crisis and for addressing the impact of the pandemic on its customers and communities.
Of a truth, 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. Though the bears have maintained a relative stronghold on the market, the G T bank stock has grown by 21.06 per cent from N29.20 in January 2, 2020 to N35.35 per share as at November 20, 2020.
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. Curiously, the reputable Harvard Business School in United States of America (USA) and Cranfield Business School had as a result carried out a deep research on the effectiveness and uniqueness of the G T brand.
Its modest success has shown that quality actually pays in the long-run. This may be the reason why the bank has run a modest, focused, tight and qualitative organization. In fact, the bank believes in doing its own thing rather than join the fray of aggressive competition that pervades the Nigerian banking industry.
From the early 1990’s the bank has tirelessly set the pace for other Nigerian financial institutions in terms of service quality, product functionality and excellent customer service. However, that quality of service may be waning now given the increased number of customers prompted by those migrating from the rescued banks. This has put more pressure on its capacity to maintain its quality. After listing at the stock exchange in 1996, it was the first Nigerian financial institution to undertake US$350million S Eurobond issue and a US$750million Global Depository Receipts (GDR) offer. The listing of the GDRs on the London Stock Exchange in July 2007 made the bank the first Nigerian Company and African Bank to attain such a landmark achievement.
G T Bank is one of the blue-chip companies on the Nigerian Stock Exchange. Many have earned a living by investing in the bank’s shares. The bank has been generous to its loyal share with impressive dividends.
But this is happening when majority of listed deposit money banks (DMBs) financial performance scorecard in the third quarter of the financial year 2020 reflects the sluggish economic disposition of the nation as average banks’ profits weakened as against the corresponding year’s numbers. In fact, strong indications show that the country is sliding into the deepest recession in the history of its existence given the ravaging effect of Coronavirus and the low price of crude.