•Loses top spot to Zenith
By OKEY ONYENWEAKU
In what must rank as one of its best business years ever, GTBank, without doubt one of Nigeria’s most admired lender, has recorded a chest thumping profitability performance. It posted N215 billion profit before tax for the year ended December 31, 2019.
Even though the performance marked a decline in percentage terms from last year’s figure of N200.2billion (21 percent growth in 2017), it is however an improvement in absolute terms. The result has excited finance sector analysts who hailed it. Mr. David Adonri of High Cap Securities ltd calls it a ‘’grade A’’ performance.
Given the challenge of the operating environment, especially the many uncertainties of the election year this performance is very commendable’’, Last year, GT Bank posted 21 percent increase in PBT, which was a significant improvement on the year 2016 result. Indeed, GT Bank has sustained a high earnings profile since its establishment 29 years ago.
Its high year on year performance, professionalism, efficient service delivery and strong brand equity have made the lender a clear industry leader.
When he assumed office as Group Managing Director/ Chief Executive Officer in April 2011 at the death of former GMD/CEO, Tayo Aderinokun, Mr. Segun Agbaje, the urbane and self effacing top gun left no one in any doubt of his core objectives.
According to sources close to him, unusually taciturn banker said he would be focused on profitability and gaining value for his customers and shareholders.
Agbaje, who appears to revel in his reputation as a rather difficult, no nonsense manager, has not derailed from these core objectives.
In the last eight years when he has been on the saddle, the bank’s profitability has grown by about 15 per cent annually.
A critical look of the results reveals positive performance across all financial metrics and improved strategic positioning of the brand. Gross earnings for the year grew by 3.7% to ₦434.7billion from ₦419.2billion reported in the December 2017.
Profit before tax stood at ₦215.6billion, representing a growth of 9.1% over ₦197.7billion* recorded in the corresponding year ended December 2017. The Bank’s customer deposits increased by 10.3% to ₦2.274trillion from ₦2.062trillion in December 2017, however, loan book dipped by 12.9% from ₦1.449trillion recorded as at December 2017 to ₦1.262trillion in December 2018.
In view of the above, the Bank closed the 2018 financial year with Total Assets of ₦3.287trillion and Shareholders’ Funds of ₦575.6Billion. In terms of Assets quality, NPL ratio and Cost of Risk improved to 7.3% and 0.3% in December 2018 from 7.7% and 0.8% in December 2017 respectively. In addition, coverage ratio for NPL stood at 105.1% and Capital adequacy ratio remained very strong, closing at 23.4% despite the implementation of IFRS 9. On the backdrop of this result, Post Tax Return on Equity (ROAE) and Return on Assets (ROAA) closed at 30.9% and 5.6% respectively. The Bank is proposing final dividend of ₦2.45k per unit of ordinary share held by shareholders in addition to interim dividend of 30k per unit of ordinary share bringing total dividend for 2018 financial year to ₦2.75k per unit of ordinary share.
Commenting on the financial results, the Managing Director/CEO of Guaranty Trust Bank plc, Mr Segun Agbaje, said; “In 2018, our focus on staying nimble, strengthening customer relationships and driving our digital-first strategy paid off. We successfully navigated the pressures of our challenging and radically changing business environment, recorded growth across key financial indices and reaffirmed our position as one of the best performing and well managed financial institutions in Africa.
He further stated that; ‘This result reflects, not just the fundamental strength of our brand, but also our commitment to our values of excellence, creating value for all stakeholders and putting our customers first in everything that we do. Driven by these values, we are building the bank of the future by pairing the best of our business with the massive potential of digital technologies to create Africa’s first integrated and trusted platform; Habari.
GTBank has continued to report the best financial ratios in terms of profitability, efficiency and capital for a Financial Institution in Nigeria as revealed by its return on equity (ROAE) of 30.9%, cost to income ratio of 37.1% and capital adequacy of 23.4%. These ratios are a testament to the efficient management of the Bank. In recognition of the Bank’s bias for world class corporate governance standards, excellent service delivery and innovation, GTBank has been a recipient of numerous awards over the years. Some of the Bank’s awards in 2018 include Bank of the Year – Nigeria from the Banker Magazine, Best Banking Group and Best Retail Bank Nigeria from World Finance Magazine, Most Innovative Bank from the African Investor, and Best Digital Banking Brand in Nigeria from the Global Brands Magazine.
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 which is trading at N37.30 per share on Friday March 8, 2019 is the second highest priced on the price chart on NSE.
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 Crainfield 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.