Trading in Guaranty Trust Bank shares was suspended on Friday in preparation for the delisting of the bank and subsequent listing of the new Holding Company (Holdco). According to the bank’s management, GTBank is adjusting its operating model and service offerings to remain relevant in the financial services sector and position the bank for sustainable long-term growth given the increasing evolution of businesses across the globe.
Post restructuring, the GTB Holdco structure will consist of the banking subsidiaries and the non-banking subsidiaries. The banking subsidiaries will include GTBank (Nigeria, West Africa & East Africa) and GTBank UK while the non-banking subsidiaries will be a payment company, an asset management company, and a pension business.
The Non-Banking subsidiaries
Based on information from previous conference calls, the bank plans to leverage its existing fintech business. GTbank has a vibrant fintech business. The bank’s management noted that the best description for the structure of the payment business they plan to have would be Ali Pay. GTPay is a secure internet payment gateway developed to facilitate payments online using debit cards issued by banks on the Interswitch Network. In terms of USSD transaction counts, the bank’s management noted at the FY 2020 conference call that GTbank accounts for about 18% of the NIBSS Instant Payments (NIP) outflows and about 16-17% on the inflow side. USSD is growing at about 37%, though expected to slow down as it gradually becomes more expensive. The Managing Director noted that there will be no transfer pricing as any business the fintech does will be in addition to what the bank is currently doing. There will be a merchant acquiring side, and the payment business will work with the bank to develop a mobile wallet strategy which will be taken to other three African countries, probably Ghana, Cote d’Ivoire, and Kenya to drive scale.
Pension Fund Administrator (PFA)
The management of the bank noted that a small existing business in the PFA segment will be acquired and grown organically.
The bank also plans to acquire an asset management business which many believe will be Investment One, a former subsidiary of the bank before the divestment of its non-banking subsidiaries to become a full commercial bank.
The scheme of arrangement
The bank’s current board will be dissolved, and new boards reconstituted for both the Holdco and the bank. There will be a seven-member board at the Holdco level and an eight-member board at the bank level.
Under the terms of the scheme and subject to the conditions, the scheme shareholders will receive the same number of Holdco shares in exchange for their current GT Bank Shares. On the effective date, each shareholder of GT Bank will receive one share of the Holdco shares for every GT Bank shares held within five business days of the effective date