BY EMEKA EJERE
Nigeria’s biggest bank by market capitalization, Guarantee Trust Bank (GTBank) Plc, has again demonstrated operational resilience in the financial year ended December 31, 2020, with results showing improvement across key financial metrics.
With the performance reaffirming the bank’s ability to navigate the current global economic challenges occasioned by the impact of COVID 19 pandemic, analysts say it is a reflection of the lender’s position as one of the leading and best managed financial institutions in Africa.
In its audited financial statements released on Thursday, the bank reported 4.6 per cent leap year-on-year in revenue to N455.23bn from N435.31bn, 2.33 per cent growth in profit and a final dividend per share of N2.70, bringing its total to N3 per share for the financial year under review.
According to the results, the tier one lender’s profit after tax (PAT) rose to N201.44bn from N198.85bn in 2019. Its profit before tax (PBT) rose to N239.09bn from N231.71bn in 2019. Deposits from customers surged by 38.74 per cent to N3.51tn in 2020 from N2.53tn a year ago, while loans and advances to customers rose to N1.66tn from N1.50tn.
GTBank said during the 2020 financial year, its directors declared and paid an interim dividend of 30 kobo per ordinary share on the issued capital of 29,431,179,224 ordinary shares of 50 kobo each, for the half-year period ended June 30, 2020.
“The directors recommend the payment of a final dividend of N2.70k per ordinary share of 50 kobo (bringing the total dividend for the financial year ended December 31, 2020 to N3.00k (2019: N2.80K per share). Withholding tax would be deducted at the point of payment,” it added.
Analysts at Cordros Capital Limited said despite weaker performance in the third and fourth quarters of 2020 and as the performance came under pressure as expected, the bank managed to record a relatively stronger performance primarily due to a 30.8 per cent quarter-on-quarter decline in interest expense.
“In conjunction with sustained efficiency and performance across key lines, FX revaluation gains, this strong balance sheet management was responsible for the performance recorded. Our estimates are under review,” they said in an emailed note on Thursday.
Commenting on the financial results, the Managing Director/Chief Executive Officer, Guaranty Trust Bank Plc, Mr Segun Agbaje, said, “2020 was arguably the most challenging year that the world has faced in decades.
“In such unprecedented times, we sought to live out the full extent of our values; safeguarding lives and livelihoods for our people, our customers and across the communities where we operate.
“We were on solid footing going into 2020; the strength, scale and liquidity of our balance sheet, coupled with the quality of our past decisions and the efficacy of our digital-first customer-centric strategy gave us the resilience and flexibility to navigate the economic shocks and market volatility that dominated the year.”
He added, “Amidst the many challenges that persist, we remain ardent believers in Africa’s growth potential. Our world is increasingly digital, and we see it opening new and exciting opportunities for empowering people and uplifting our communities.
“With our commitment to deepening customer relationships and intense focus on delivering innovative financial solutions, we enter 2021 well-positioned to lead this new world.”
Not many will be surprise that the leading Nigerian lender has good stories to tell even at the most turbulent times in the business world. This is because, for a bank which is constantly busy fashioning out the best way not only to service its customers but also to increase shareholder value for investors that is bound to happen.
The bank is currently transiting to the more open-ended Holding Company structure, which in the words of its CEO is informed by the imperative of diversification.
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.
At a press briefing late last year Agbaje, who disclosed that the bank had 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, adding that 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 stated.
Agbaje, who noted that most leading banks today are holding companies, said the new entity would not only compete with fintechs but would also explore the huge opportunities in the SMEs field, which in his view have barely been scratched.
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.