Banking
GTBank’s Reduction of NPL Ratio to 7.3% Excites Shareholders
By Dipo Olowookere
One of the issues that give serious concerns to stakeholders in the banking sector in Nigeria is the rising rate of non-performing loans (NPLs).
This is because it reduces cash flow, ties up capital, and reduces profitability, making shareholders get less or no dividend at the end of a financial year.
But one financial institution that has been working hard to reduce its bad debts is Guaranty Trust Bank (GTBank) Plc.
Few days ago, the pan-African bank released its numbers for the year ended December 31, 2018 and going by reviews, the company put up a good performance in the period under review.
GTBank is a financial institution listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE).
An analysis of the financial statements showed that gross earnings improved by 3.7 percent to N434.7 billion from N419.2 billion reported in December 2017, while the profit before tax stood at N215.6 billion, representing a growth of 9.1 percent over N197.7 billion recorded in the corresponding year ended December 2017, with the bank’s customer deposits increasing by 10.3 percent to N2.274 trillion from N2.062 trillion in December 2017.
While the NPL ratio dropped to 7.3 percent from 7.7 percent, the loan book dipped by 12.9 percent from N1.449 trillion recorded as at December 2017 to N1.262 trillion in December 2018, with the Cost of Risk closing at 0.3 percent in December 2018 versus 0.8 percent in December 2017.
Business Post reports that though the Capital Adequacy Ratio (CAR) dropped to 23.4 percent from 25.7 percent a year earlier, loans to deposits ended at 53.5 percent against 67.5 percent in FY 2017.
In addition, the coverage ratio for NPL stood at 105.1 percent while the Post Tax Return on Equity (ROAE) and Return on Assets (ROAA) closed at 30.9 percent and 5.6 percent respectively.
Impressed by the performance of the firm in the reviewed year, Managing Director/CEO of GTBank, 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 said further 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.”
Some holders of the bank’s shares, who spokes with Business Post after the release of the results expressed their excitement at the gradual reduction of the company’s bad loans.
“It is a good development and I am happy that this will bring more value to my investment in the bank,” Blessing Omorodion, a shareholder with GTBank said.
At its January 2019 meeting, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) expressed its satisfaction with the gradual reduction in NPL of deposit money banks (DMBs) in the country, which it said has further strengthened their balance sheets.
The committee had expressed believe that as government pays off contractor debt and other obligations, there will be a sizable reduction in the NPLs of the banking system.
Recently, GTBank and other banks exposed to the $1.2 billion 9mobile (formerly Etisalat Nigeria) debt were given a part of the syndicated loan by the new owners, Teleology Holdings.
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 percent, a cost to income ratio of 37.1 percent and capital adequacy of 23.4 percent, reflecting the efficiency of the bank’s management.
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.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
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