Group Managing Director of Guaranty Trust Bank (GTBank) Plc, Mr. Segun Agbaje, Tuesday, declared that the decision of the bank’s management to diversify into retail business over five years ago has become the building block for its phenomenal growth in recent times.
Agbaje who spoke while sharing the facts behind the bank’s performance in the 2016 financial year in Lagos, yesterday, said that though it still maintains a strong corporate banking operations, much of its activities in the nation’s financial services space in recent times were being driven by retail transactions.
According to him, part of management’s efforts to grow the bank’s retail business include the adoption of banking processes and touch points that make transactions simpler, easier and faster for customers regardless of where they choose to bank.
“As a result of this approach, our customer base has tripled over the last five years to 9.68 million as at December 31, 2016 and we have also seen tremendous growth in customer adoption of our digital services,” he said.
Agbaje revealed that the bank has already secured banking license from the Tanzanian Central Bank to open a subsidiary in Dares Salem, as part of efforts to grow its offshore footprints to the eastern part of Africa, promising that the management would continue to take advantage of profit opportunities wherever necessary in the interest of its stakeholders.
On the challenge of overcrowding often noticed in some of its branches in Nigeria, the GTB boss said efforts are being made to increase the service touch points to give customers more exciting banking experience, including ensuring that in no distant time most banking transactions would be done on phones and through the internet from the comfort of customers offices and homes.
He, however, called on bank customers to be wary of third party interfaces that expose critical information about their accounts to stem the rising wave of electronic fraud in the banking industry.
He said, “we have observed also that most of the fraud we see are really more of individuals exposing their card details to third parties and not much of system compromises.”
He also said that his bank is selling PTA and BTA to all genuine customers asking for them in line with the Central Bank of Nigeria (CBN) directive.
Meanwhile, giving a breakdown of the bank’s performances in the 2016 financial year, Agbaje said it posted gross income of N414.62 billion showing a growth of 37 per cent from N302 billion in 2015, with interest income contributing N262.49 billion of the gross income while its non-interest income grew from 24 per cent in 2015 to 37 per cent in 2016.
But the bank’s impairment charges soared by 426 per cent to N65.29 billion, to dwarf both the increase in interest income and the cost saving from interest expenses with net income after impairment charges dropping by 12 per cent to N130.11 billion at the end of 2016. This means that interest income did not contribute to the profit growth the bank achieved in the 2016 operations.
At another level, loans and advances grew strongly in the year at 16 per cent to N1.59 trillion, doubling the increase of 7 per cent recorded in 2015. Investment assets also grew by more than 34 per cent to stand at over N528 billion in the year. These spurred the increase of 23 per cent in asset base, which amounted to a little over N3 trillion at the end of 2016.
The bank maintained a tight control on operating expenses, which helped to moderate the impact of the huge loan loss expenses and permitted the increase in non-interest income to flow down to the bottom line.
GTB closed the 2016 financial year with a net profit of N131.34 billion, representing a growth of 33 per cent compared to a flat growth in the preceding year.
Earnings per share amounted to N4.67 kobo at the end of 2016 against N3.51 in 2015 as it is proposing a final cash dividend of N2 per share, when added to the interim of 25 kobo it paid at the end of its half year.