Segun Agbaje, CEO, GTBank

By OKEY ONYENWEAKU

Over the years one bank in Nigeria that arguably has attracted an enormous volume of attention is GT Bank. And it has mainly been for good. In fact, that bank is once again grabbing headlines in the media. And this time around it even seems for the better in its current status as a full-fledged Holding Company.

On this transition, its GMD, Mr. Segun Agbaje had averred recently that that most leading banks today are holding companies. And to give an inkling of what would possibly be added to the existing fare going forward, Agbaje had hinted that the new entity will not only compete with fintechs but would equally go ahead to similarly explore the huge opportunities in the SMEs field, which in his view have barely been scratched.

According to Agbaje then, it is clearly the imperative of diversification for more beneficial outcomes that has led the bank on to transiting to a Holdco structure.

The holding company structure, experts say helps firms not only to protect their assets against the threat of concentrated volatility but to also reduce risks overall.

On his part, Agbaje also disclosed that the new entity would leverage on its solid 21 million customer base to compete even more profitably in the industry, and that the entity’s current target was to soon be number 5 in Africa in terms of profit.

The bank Agbaje said 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.

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.

And the half year outcome shows the future

Guaranty Trust Holding Company Plc, formerly Guaranty Trust Bank Plc, in its half year 2021 results, reported profit before tax of N93.1billion, representing a dip of 15.2% compared to N109.7billion recorded in the corresponding period of June 2020.

Notwithstanding this, the Groups transactional income maintained an upward trajectory as shown in fees and commission income which grew by 44.7% from N26.5billion in H1 2020 to N38.3billion in H1 2021.

Overall, the results showed a decent performance across key financial metrics against the challenging business environment.

The structure and earning capacity of the Groups balance sheet remained resilient with total assets closing at N5.017trillion, primarily driven by a 4% increase in deposit liabilities from N3.611trillion in December 2020 to N3.755trillion in June 2021 and a slight dip in loans (net) by 1.8% from N1.663trillion as at December 2020 to N1.632trillion in June 2021.

Regardless, the dip in profit can be attributed to the present realities of the operating environment.

Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 24.0%, while Asset quality was sustained as NPL ratio and Cost of Risk (COR) closed at 6.0% based on IFRS (6.8% based on CBN Prudential Guidelines) and 0.27% in June 2021 to 6.4% and 1.18% in December 2020, respectively.

Commenting on the financials, Mr. Segun Agbaje, Group Chief Executive Officer of Guaranty Trust Holding Company Plc said; The results reflect our commitment to building on our track record of solid financial performance, and our capability to constantly innovate will ensure we stay ahead of the curve at all times.

“We are counting on the enduring support of our loyal customers and the hard work of our dedicated staff to continually make end-to-end financial services easily accessible to everyone and to create the best outcomes for all our customers and the communities in which we operate.

He further stated that; Looking forward, we are focused on bringing to bear the full benefits of our new corporate structure by consolidating our leading position in all the economies where our franchise operates.

“We will also diversify our earnings from core banking, continue to empower businesses across Africa and beyond, and generate long-term returns for our shareholders.

Overall, Guaranty Trust Bank Plc continues to post one of the best metrics in the Nigerian Banking industry in terms of key financial ratios i.e. Post-Tax Return on Equity (ROAE) of 19.7%, Post-Tax Return on Assets (ROAA) of 3.2%, Full Impact Capital Adequacy Ratio (CAR) of 24.0% and Cost to Income ratio of 49.0%.

Guaranty Trust Bank Plc has been at the forefront of delivering innovative banking products and services to customers and superior Return-on-Equity (ROE) to shareholders.

It is widely regarded as the best managed financial institution in Nigeria and was recently recognized as Africa’s Best Bank and the Best Bank in Nigeria at the 2021 Euromoney Awards for Excellence.

Guaranty Trust Bank also retained its position as Africa’s Most Admired Financial Services Brand in the 2021 ranking of The Brand Africa 100: Africa’s Best Brands.

In the first quarter 2021, Its Profit before tax of N53.7bn (31 March 2020 N58.2bn) a decrease of 7.8%.

– Profit after tax decreased by 9.0% to N45.5bn from N50.1bn as of 31 March 2020.

– Earnings per share of 160kobo compared to 177kobo per share as of 31 March 2020.

At year end 2020, 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.

A proposal for 30k dividends

Meanwhile, the bank has proposed an interim dividend of 30 kobo per 50 kobo ordinary share for the first half of the year ended 30 June, 2021.

The proposal is subject to appropriate withholding tax, with a qualification date of September 27, 2021.

On Tuesday October 12, 2021, the dividend which amounts to N8.83 billion will be disbursed electronically to ordinary shareholders whose names appear on the Register of Members as at Monday, September 27, 2021, and who have completed the e-dividend registration and mandated their Registrar to pay their dividends directly into their bank accounts. Holders of GTCOs GDR listed on the London Stock Exchange will also receive their dividend payment subsequently.

The holdco has 29,431,179,224 outstanding shares and a market capitalization of N797.58 billion as at the time of filing this report. The banks shares opened trading on 10th of September, 2021 at N27.10 per share.

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.

As surmised by many an analyst, 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. With the bears maintaining a relative stronghold on the market, the G T bank stock has dropped by 16.7 per cent from N33.50 in January 4, 2021 to N27.90 per share as at September 29, 2021.

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 a US$350million 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 for the majority of listed deposit money banks (DMBs), their financial performance scorecard in the second quarter of the financial year 2021 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 still sliding. And that is a cause for daily concern even for the more nimble and ambitious.