By Dipo Olowookere
In preparation for the eventual delisting of shares of Guaranty Trust Bank (GTBank) Plc from its trading platform, the Nigerian Exchange (NGX) Limited on Friday, June 18, 2021, placed the banking stock on a full suspension.
GTBank, a tier-one lender trading its equities on the exchange, intends to transform into a financial holding company (Holdco) so as to offer a wide range of services it is restricted to do.
Some years ago, the Central Bank of Nigeria (CBN) directed banks in the country to offload their subsidiaries not performing core lending services.
This was after many deposit money banks (DMBs) were delving into different business ventures, including insurance, stockbroking, asset management, amongst others.
For the CBN, which regulates the banking industry in Nigeria, most of these banks were losing focus and were not supporting businesses that need funds to grow and then stimulate the economy in the process.
To address this issue, the apex bank asked banks to sell off their non-banking assets and this forced many of them to offload their companies not offering core banking services.
However, there was an opening for banks to still delve into other sectors within the financial and capital markets and this was by operating as a Holdco.
A few of them towed this path, including FBN Holdings, Stanbic IBTC Holdings and FCMB Group.
Not wanting to be left out, GTBank is joining the party and to achieve this, it is delisting its banking arm, which is the popular GTBank from the stock exchange.
GTBank will now operate as a private company, while the new Holdco, Guaranty Trust Holding Company Plc, will now be a public company. The shares of this new firm will be listed on the NGX after the delisting of GTBank.
Last Friday, the stock exchange informed the investing community of the latest development, announcing the suspension of trading on GTBank shares.
In the circular sighted by Business Post, the NGX explained that the rationale behind placing GTBank stocks on full suspension is to “prevent trading in the shares of the bank” in preparation of its “eventual delisting”
Before trading on its stocks was suspended on Friday, GTBank closed at N28.55 on Thursday after appreciating by 50 kobo or 1.78 per cent.
