The Rise and Rise of GTB

Shareholders of Guaranty Trust Bank are literally smiling all the way to the banks with impressive year-end results
 
By KELECHI OBASI

Gilbert Chikelu, GT Bank Chairman

Not even the exit of Fola Adeola, the foundation managing director of Guaranty Trust Bank, GTB, the financial sector reform through the consolidation of Nigerian banks or even a routine contravention of certain provisions of the Central Bank of Nigeria, CBN, could stunt the giant strides of the bank towards the achievement of grabbing a double A minus (AA-) ranking for building a strong domestic franchise, good quality assets and sound earnings record from Fitch, a leading international rating agency. This score is the highest assigned to any bank in Nigeria by Fitch. An evidently elated Tayo Aderinokun, current managing director of the bank proudly announced this to equally satisfied shareholders present at the 16th edition of the company’s annual general meeting on May 24, 2006. “We commenced the last financial year in March 2005, with a firm resolve to build on the numerous achievements of the previous year, and I am pleased to say that we achieved our objectives. We continue to be a model institution, adding value to our numerous stakeholders, despite the daunting challenges posed by the operating environment”, stated Aderinokun, in his address to the crowd at the Expo Hall of the Eko Hotel.
The hall was swathed in the orange, white and grey colours of the bank’s logo which also matched the orange coloured the GTB boss and his colleagues donned.
Gilbert Chikelu, the bank’s chairman, while breaking down the performance of the financial figures declared that the impressive results posted by the institution were a testament to its commitment to growth and profitability. Gross earnings at N34 billion, grew by 36 per cent over the N25 billion reported for the last financial year, and despite a downward review of lending rates in the course of the year, the Net Interest Margin shot up by 55 per cent from N7.6 billion to N11.8 billion. Profit before tax rose from the previous year’s N7 billion to N10.5 billion for the year under review, while profit after tax rose from N5 billion to N9 billion, representing an increase of 80 per cent. The company’s total assets, including contingents stood at N383 billion as at February 2006 and shareholders funds experienced a seven per cent increase from N33.6 billion to N36 billion. According to Chikelu, “The board and management of your bank assiduously pursued the set objectives of building a financial services institution with enduring values. The results, as you are now aware, confirm that the labour has not been in vain”.
Shareholders of the bank were full of praises for the recent outstanding financial performance and progressive dividend policy which saw them cashing in N5.7 billion as full year surplus and a bonus of one new share for every three shares currently held. They also pledged their unyielding loyalty and support for the bank’s long-term goals, while restating their assurance in the ability of the bank’s management team to take the 16-year-old bank to new heights of achievement. A major element of their delight was the approval of a 95 kobo per share full-year dividend by the board of the bank, for the financial year ended February 28, 2006, which translates to a total dividend payout of N5.7 billion for the period under review, contrasting with the previous year’s total bonus payout of N3.6 billion.
Another reason for their joy is the foray of the bank into the West African subregion. Its subsidiaries and associated companies comprising Guaranty Trust Bank in Ghana, Gambia and Sierra-Leone are already consolidating their stronghold in those countries, with the growth of branch networks and widely acknowledged impact as major players in the economies. GTB Gambia reported gross earnings of $2.5 million and profits before tax of about $500,000 in 2005, with corresponding figures of $2 million and $310,000 respectively for GTB Sierra-Leone, in their four years of operations. Guaranty Trust Assurance Limited, the group’s non-bank subsidiary, currently in its second year of operations posted a profit before tax figure of N16 million in 2005, a marked improvement from the loss of N37 million for the previous year. Recently too, the bank pumped in N2.6 billion into the company’s equity, enabling it to boost its capital base to over N3 billion in fulfilment of the requirement of the National Insurance Commission, NAICOM, for insurance firms to raise their capital base by February 2007.
GTB is striding majestically into the new financial year with a bag full of awards and commendations. The bank retained its triple A, (AAA), rating by Agusto & Co in August 2005 as a confirmation of its long-term viability. Last September, the US-based CitiBank, conferred its 2005 “Quality Recognition Award” on the Funds Transfer Unit of GTB in recognition of the bank’s prompt and efficient processing of customer transactions. Also, the Nigerian Stock Exchange, NSE, honoured it with the President’s Merit Award in the banking sector, for the fourth time in nine years. In October 2005, GTB went home with the Africa Investor magazine Prize for the “Highly Commended Bank of the Year”. In addition, GTB was declared THISDAY newspaper’s “Bank of the Year” while Aderinokun was named “Banker of the Year”.
As part of its corporate social responsibility and in order to identify with the aspirations of the community in its operating environment, GTB doled out the sum of N17,634,235 as donations to charitable and non-political organisations during the financial year. The bank was incorporated as a private limited liability company on July 20, 1990 and obtained a licence to operate as a commercial bank on August 1, 1990. After commencing operations on February 11, 1991, it became a public limited company on April 2, 1996, with its shares listed on the NSE on September 9, 1996. The bank was issued a universal banking licence by the CBN, on February 5, 2001 with the aim of providing commercial banking services, ranging from retail banking to granting of loans and advances, equipment leasing, corporate finance, money market activities and allied services as well as foreign exchange operations to its customers.
Aderinokun noted that as the bank explores the regional and international environment for strategic opportunities, it would not relent in its drive for investment in relevant, cutting-edge technology to foster growth of its nationwide branch network. “In the foreseeable future, the bank’s ongoing plans to grow small and medium-scale enterprises into bigger businesses will bear fruit as our commitments in this sector continue to grow. We will be a big player in the retail and consumer banking market whilst retaining our excellent banking relationships in the corporate and multinational business segments”, he said.