Banking
High Credit Risk, FX Income Dominate GTBank Performance
By Modupe Gbadeyanka
One of the foremost financial firms in Nigeria, Guaranty Trust Bank Plc (GTBank) delivered an impressive performance in FY 2016, inspite of the low pace of credit expansion that characterized the year amid the heightened credit risk environment.
The bank, since its inception, has been dominating the sector in Nigeria, growing its customers’ base and delivery impressive performances.
After reviewing the FY 2016 earnings release and the expected performance of the bank, Wstc Financial Services Limited assigned a BUY rating on the stock, with a fair value of N29.74 implying that the current market price is trading at a 19.4 percent discount to fair value.
GTBank currently trades at a forward P/E multiple of 6.34x and P/B of 1.36x
Gross earnings grew by 37.4 percent to N415 billion (FY 2015: N301 billion), primarily on account of a significant FX revaluation gain of N87 billion (FY 2015: N5 billion) recorded in the year.
This was characteristic of the industry and akin to other players with foreign currency net asset exposure, in the light of the currency depreciation recorded in Q2 & Q3 2016.
Interest income grew by 14.5 percent to N262 billion (FY 2015: N229 billion), reflecting the impact of the elevated interest rate environment, while Interest expense declined by 3.2 percent to N67 billion (FY 2015: N69 billion).
GTBank recorded a lower interest expense which primarily resulted from the early redemption of $500 million out of the outstanding November 2013 $902 million 5-year Eurobond.
A sinking fund has also been set up towards the redemption of the remaining $402 million with no plans of refinancing, according to guidance from management. A combination of the remarkable growth in interest income and contraction in interest expense led to a 22.2 percent growth in Net interest income to N195 billion (FY 2015: N160 billion).
The deterioration in the macro environment stressed asset quality and caused a sharp rise in non-performing loan (NPL) to N61 billion (FY 2015: N45 billion) with an NPL ratio of 3.66 percent (FY 2015: 3.21 percent).
Consequently, the bank recorded a significant impairment charge of N65 billion, representing a 426.0 percent surge from FY 2015 levels of N12 billion. The bulk of the impairment charge reported was largely driven by increase in provision on FX denominated facilities due to the currency depreciation.
In line with the elevated inflationary environment, operating expense (Opex) increased by 17.9 percent to N114 billion (FY 2015: N96 billion). The key Opex drivers were fuel cost & translation differences from foreign subsidiaries.
In tandem with the impressive performance from top line, profit before tax increased by 36.8 percent to N165 billion (FY 2015: N120 billion), while profit after tax increased by 33.0 percent to N132 billion (FY 2015: N99 billion).
The Bank proposed a total dividend of N2.00, representing a payout ratio of 43 percent (FY 2015: 51 percent).
Wstc Financial Services Limited says it expects high yield on government securities to continue to support growth in interest income in FY 2017, as it expects a marginal expansion in loan book size.
Also, barring significant volatility in the FX market, the firm said it does not expect the level of FX gains recorded in FY 2016 to recur in FY 2017.
“Thus, we expect a 12.6 percent decline in gross earnings in FY 2017.
“We expect cost of funds to increase in reflection of the high interest rate environment. Also, we believe the newly introduced FGN savings bond may somewhat crowd-out the bank’s retail deposits and impact negatively on interest expense,” Wstc Financial Services Limited said.
In view of the bank’s significant loan book exposure to the oil & gas sector and the weak outlook of oil price as well as management’s recent disclosure that the Etisalat Nigeria loan (N42 billion) is expected to be restructured sometime in Q2 2017, and Wstc Financial Services Limited still expects a high impairment charge on risk assets to be recorded in FY 2017.
“Thus, we estimate that the bank’s ROAE will decline to 22.5 percent by FY 2017 (from 29.1 percent in FY 2016) as the cost to income ratio increases to 45.1 percent from 40.8 percent which resulted from FX income in FY 2016.
“We expect a FY 2017 PBT of N142 billion (more conservative than management’s guidance of N168 billion),” it added.
In estimating the fair value of GTBank, Wstc Financial Services Limited adopted a blended valuation methodology using the residual income and dividend discount valuation approaches.
Its initial year cost of equity (COE) estimate of 21.3 percent was computed using a 10-yr risk-free rate of 15.89 percent, beta of 0.74 (relative to the NSE ASI) and an equity risk premium of 5.69 percent.
Wstc Financial Services Limited says it arrived at a Fair value estimate of N29.74 per share, pointing out that its fair value estimate implies justified forward P/E multiple of 7.57x and P/BV multiple of 1.62x, while the current market price is at an 19.4 percent discount to its fair value; “hence, we rate the company’s stock a BUY.”
By Modupe Gbadeyanka
The six edition of the Hackaholics of Wema Bank Plc has produced 20 top finalists shared equally between two streams, Ideathon and Hackathon.
The Hackathon finalists are Rapid DEV, Secure IT, Neurafeed, Trust Lock Babcock, Pulse Track, IlluminiTrust, Trust Lock FUTA, Fix Fraud AI, KASH Flow and VOC AI.
The Ideathon finalists include PLOY, Fertitude, VarsityScape, Mama ALERT, StockMed, Chao, All Arbitrate, FarmSlate, Sane AI and Cycle X.
They emerged after a two-day pre-pitch held on December 16 and 17, 2025, for the grand finale slated for Friday, December 19, 2025.
They grand finale of Hackaholics 6.0 will convene the top players in Africa’s tech and innovation ecosystem, creating an avenue for these finalists to not only put their creativity to the ultimate test but also give their solutions visibility to potential investors for additional funding opportunities beyond the prizes to be won.
The prizes to be won for the Ideathon include N25 million for the winner, N20 million for the first runner-up, N15 million for the second runner-up and N5 million each for two women-led teams.
In the Hackathon category, the first to fourth-place winners will receive N20 million, N15 million, N10 million and N5 million, respectively.
The pre-pitch saw the top 43 contenders battle in a game of innovation and problem solving, presenting compelling pitches for a chance to make it to top 10 in their respective streams.
After a rigorous stretch of pitches and presentations, the top 20 emerged, securing their spot in the grand finale of Hackaholics 6.0.
“Hackaholics started off as a hackathon and morphed into an ideation. For Hackaholics 6.0, the sixth edition, we decided to give both the builders of new solutions and the refiners of existing ones, an opportunity to make meaningful impact.
“For us at Wema Bank, we understand that innovation isn’t just building from scratch. Sometimes, it’s looking at what exists and developing new ways to optimise that and create more efficiency. This is the idea behind our two-stream Ideathon-Hackathon structure.
“Every year, Hackaholics shows us just how eager and motivated Nigerian youth are when it comes to exploring creativity and innovation, and we are honoured to be the institution that provides them with the platform and resources to put this drive to good use.
“We toured seven cities, indulged 1,460 participants and discovered hundreds of remarkable ideas; some of which needed some refining and some of which deserved to move to the next stage.
“For those who needed to go back to the drawing board, we provided useful guidance and for the top contenders, we were able to shortlist to the top 43, who proceeded to the pre-pitch. To every participant, Wema Bank is proud of you. This is just the beginning,” the chief executive of Wema Bank, Mr Moruf Oseni, said.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) says it will enforce penalties against designated banks that delay the remittance of customs revenue, in a move aimed at strengthening transparency and safeguarding government earnings.
This was disclosed in a statement on the NCS official account on X, formerly known as Twitter and signed by its spokesman, Mr Abdullahi Maiwada, who said the delays undermine the efficiency, transparency, and integrity of government revenue administration.
“The Nigeria Customs Service has noted instances of delayed remittance of customs revenue by some designated banks following reconciliation of collections processed through the B’odogwu platform,” the statement read.
“Such delays constitute a breach of remittance obligations and negatively impact the efficiency, transparency, and integrity of government revenue administration.
“In line with the provisions of the Service Level Agreement executed between the Nigeria Customs Service and designated banks, the Service hereby notifies stakeholders of the commencement of enforcement actions against banks found to be in default of agreed remittance timelines.”
Mr Maiwada disclosed that any bank that fails to remit collected Customs revenue within the prescribed timeline will be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the period of the delay.
He added that affected banks would be formally notified of the delayed amounts, the applicable penalty, and the deadline for settlement.
“Accordingly, any designated bank that fails to remit collected Customs revenue within the prescribed period shall be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the duration of the delay.
“Affected banks will receive formal notifications indicating the delayed amount, applicable penalty, and the timeline for settlement,” the statement read.
By Aduragbemi Omiyale
The deputy managing director of First Bank of Nigeria (FBN) Limited, Mr Ini Ebong, has offloaded some shares of FBN Holdings Plc, the parent firm of the banking institution.
A regulatory notice from the Nigerian Exchange (NGX) Limited confirmed the development on Thursday.
It was disclosed that the transaction occurred on Friday, December 12, 2025, on the floor of the stock exchange.
The sale involved about 11.8 million shares, precisely 11,783,333 units traded at N31.14 per share, amounting to about N366.9 million.
Mr Ebong, who studied Architecture from University of Ife and obtained Bachelor and Master of Science degrees, became the DMD of First Bank in June 2024. Prior to this appointment, he was Executive Director, Treasury and International Banking since January 2022.
He was previously the Group Executive, Treasury and International Banking, a position he held since 2016 after serving as the bank’s Treasurer from 2011 to 2016.
Before joining First Bank, he was the Head of African Fixed Income and Local Markets Trading, Renaissance Securities Nigeria Limited, the Nigerian registered subsidiary of Renaissance Capital. He also worked with Citigroup for 14 years as Country Treasurer and Sales and Trading Business Head.
He has a passion for market development and has worked actively to drive change and internationalisation of the Nigerian financial markets: foreign exchange, fixed income and securities.
He has worked closely with regulatory bodies such as the Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) in assisting with the development of fresh monetary and foreign exchange policies, to broaden and deepen markets and open them up to international practices.
At various times he has facilitated and delivered courses and seminars on a wide variety of subjects covering Money Markets, Securities and Foreign exchange trading and market risk management subjects to regulators, corporate customers, banks and market participants.
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