By AYOOLA OLAOLUWA
When Guaranty Trust Bank Plc. transformed into a holding company – GTCO – in May 2021 after securing regulatory approval from the Central Bank of Nigeria (CBN), its management had hoped that the transition would help lift the company to profitability.
Due to declining earnings contribution from core banking operations occasioned by COVID-19 induced economic meltdown, Deposits Money Banks (DMBs), it would be recalled, had considered several options, including consolidating their businesses into holding companies for a better and efficient management.
However, harmstrung by the 2010 CBN regulation which stopped banks from operating their non-banking subsidiaries, GTBanks and other DMBs could not run non-lending businesses.
The bank’s management, however, had an option: divest from non-core lending service or restructure as a holding company, an opportunity the management quickly grabbed.
The re-organisation presented the bank the opportunity to offer more services beyond its existing banking business, especially payments business which have been on top of the group’s mind, and other businesses such as insurance, pension funds management, as well as assets management and others.
While the banking arm of the company has regained its mojo in spite of worsening economic crisis, its subsidiaries had also been declaring profits, thereby lifting the GTCO Group to more profitability.
One of such subsidiaries is HabariPay, the fintech arm of GTCO officially launched in June 2021 as the first mobile platform in Nigeria to be floated by a financial institution.
Unlike traditional banking institutions, which offer limited bouquet of regular banking products to customers, Habari focuses on enabling customers needs and lifestyles.
For instance, the Payment Service Bank (PSB) provider users direct access to catalogues of local and foreign music online; seamless shopping for home essentials, fresh groceries, ready to wear fashion items and electronic gadgets, all with discounts and deals to match.
To drive the PSB, GTCO launched an app named SquadCo, which eases payments for services and products.
The app comes with various functions and tools, including payment links which offers customers dynamic payment experience at the click of a link; SquadPOS, which turns mobile phones to POS and collect card payments on the go; access to a dedicated USSD code for businesses; allow customers set up their online store with no coding or design skills and sell their products or services to buyers wherever they are, as well as Virtual Accounts where users can create virtual business accounts to accept payments.
Despite joining the fintech race late, HabariPay has continued to achieve landmarks.
The firm in its notes to the accounts of the bank, announced a profit before tax of N688.9 million in the first nine months of 2022. With operating income for the period under review standing at N907 million.
The declared PBT is an improvement in the N447.8 million operating income and pre-tax profits of N377 million in the first six months of 2022.
The firm’s operating income was N460 million in the third quarter, N447.8 million in the second and zero in the first quarter of 2022.
Further breakdown of the report shows that Habiri Pay recorded 75% profit margin compared to the last declared results.
Financial experts who spoke on the bank’s performance agreed that for it to post strong profits in just six months of actual operations, the GTCO subsidiary will grow to become one of the bank’s profit contributors.
According to Ibrahim Shelleng, Managing Director at Credent Investment Managers, Abuja, the holdco structure will allow GTCO Plc. to leverage its brand to capture market share in financial services outside of banking.
“With the financial muscle they possess, they would be able to diversify into other financial services, attract the best talent and boost their profitability,” he stated.
Meanwhile, in recognition of its efforts to deepen digital payments acceptance for businesses in Nigeria and the continent, Squad, the fintech payment product of HabariPay, has received the “Accelerating Digital Acceptance in Africa” award from Mastercard.
The award was given at the inaugural session of the Mastercard EDGE 2022 held to recognise outstanding fintech companies and business leaders that are revolutionising payments in various ecosystems.
The Mastercard EDGE – ‘Envision the Future of Digital, Gateways and e-Commerce Forum’ – took place at Internet City, Dubai.
The event hosted tech industry experts from across acquirers, PSPs and payment technology innovators who convened to discuss the future of digital payments in emerging markets and witnessed the recognition of brands that are leading payment innovation in Africa and beyond.
According to the organisers, HabariPay was awarded for creating a turnkey solution that allows merchants to easily accept cashless payments in-store and online.
Under Squad’s portfolio is its flagship SquadPOS solution, a first-of-its-kind payment technology in Nigeria that enables merchants to accept card payments with NFC-enabled android devices. Its other solutions include Squad Virtual Account, Squad Payment Link, Squad Storefront, and Squad USSD.
Speaking on the award, the Managing Director, HabariPay, Eduofon Japhet, said it would motivate the firm to aspire to greater heights.
“We are deeply motivated by a passion for helping merchants receive payments in an easy.
“It is indeed an honor for us to be recognized for our efforts toward driving digital payment acceptance within the African landscape.
“We are deeply motivated by a passion for helping merchants receive payments in an easy, efficient, and cost-effective way so that they can thrive in this ever-evolving digital economy.
“In building Squad, our goal was to create a level-playing field for businesses to access a complete, affordable, and efficient tool that helps them receive payments online or in-store.
“Though this product has only been in the market for a few months, we are excited to see how many businesses are steadily adopting it to help simplify their daily business processes.
“We are also inspired to see that our work at HabariPay is not going unnoticed, and we are grateful to the Mastercard team for this recognition.
“We are encouraged to accelerate our mission to simplify payments for businesses in Africa and will continue to work toward leading innovation within this payment ecosystem,” the HabariPay managing director declared.