Race To ₦500billion And Beyond: Shareholders And Industry Watchers Back GTCO Plc To Outperform 

Following the success of its Third Annual General Meeting (AGM) where, amongst other matters considered under Special Business, Guaranty Trust Holding Company Plc secured the authorisation of its Shareholders to raise additional capital of up to US$750 million or its equivalent in Nigerian naira and related provisions and effectively amend its Memorandum of Association to accommodate the proposed increase in the issued share capital of the Company, one is justified to believe that the foremost financial services holding company is well on its way to consolidate its dominance of financial services not just in Nigeria but also across Africa.

In a decisive move aimed at fortifying its position as a vanguard of financial innovation across Africa, GTCO Plc had announced an ambitious $750 million recapitalization plan. This strategic initiative came on the heels of the company’s stellar performance in the full year 2023, marking a pivotal moment in the company’s trajectory towards shaping the continent’s financial landscape. Notwithstanding the challenges and headwinds that weighed on business operations last year, GTCO Plc delivered a profit before tax of ₦609.3 billion representing a growth of 184.5% from the ₦214.2 billion achieved in 2022. Though revaluation gains played a part, this result was largely on the back of impressive growth in its core business activities. On the balance sheet side, the Financial Services Group maintained a well-structured and diversified position across its banking franchise and non-banking verticals, posting growth across all asset lines to close fiscal 2023 with total assets of ₦9.69 trillion representing a 50.0% growth over ₦6.45 trillion recorded in the prior year. In keeping with this trajectory, GTCO’s first quarter 2024 unaudited financial results have not only reaffirmed its stature as a leading financial services provider but also set new benchmarks for the industry. With profit before tax soaring to an impressive ₦509.3 billion from ₦74.1 billion recorded in the corresponding period ended March 2023 (representing a staggering 587.5% increase) and total assets closing at ₦13.0 trillion, GTCO has once again demonstrated its robustness and resilience in navigating challenging economic environments, blowing competition completely out of the water in the process.

Overall, the Group continues to post one of the best metrics in the Nigerian financial services industry in terms of key financial ratios with its latest results (Q1-2024) i.e., pre-tax return on equity (ROAE) of 117.0%, pre-tax return on assets (ROAA) of 18.0%, full impact capital adequacy ratio (CAR) of 24.9% and cost-to-income ratio (CIR) of 16.3%.

In the dynamic landscape of Nigeria’s financial sector, GTCO Plc stands tall as a beacon of innovation, excellence, and trailblazing achievements. The company’s steadfast commitment to operational efficiency, innovation, and prudent risk management have been pivotal in sustaining its competitive edge amidst evolving market dynamics. In 1990, a largely underserved market and the quest to set and exceed service delivery standards in the financial sector resulted in the incorporation of Guaranty Trust Bank, a private limited liability company wholly owned by Nigerian individuals and institutions. From the outset, the bank distinguished itself by introducing novel concepts and innovative practices that set it apart from its peers, effectively modelling its “Proudly African, Truly International” tagline. In 1999, GTBank made history by becoming the first Nigerian bank to launch internet banking services, ushering in a new era of convenience and accessibility for its customers. This groundbreaking move underscored the bank’s commitment to harnessing technology to enhance customer experience and drive financial inclusion. Since then, industry-shaping initiatives like USSD Banking with the launch of *737# in 2016 and the recent redesign and upgrade of its mobile banking platform, GTWorld, demonstrate GTCO’s relentless commitment to innovation and service excellence.

GTCO Plc’s quest for excellence and unwavering commitment to innovation is embodied by its flagship banking franchise – Guaranty Trust Bank. With a presence in eleven countries across Africa and the United Kingdom, Guaranty Trust Bank has cemented its reputation as a leading African financial institution on the global stage. The financial services company was the first wholly owned Nigerian financial institution to attain a ₦1 billion profit figure just five years into its operations. It went on to establish subsidiaries outside Africa (Gambia and Sierra Leone) in 2002, becoming the first Nigerian Banking franchise overseas. In 2007, Guaranty Trust Bank became the first sub-Saharan and Nigerian bank to be listed on the London Stock Exchange and the first Nigerian company to undertake a US$350 million regulation S Eurobond issue and a US$750 million Global Depositary Receipts (GDR) Offer. The GDR listing on the London Bourse proved to be a resounding success, attracting interest from a diverse array of global investors eager to capitalise on Africa’s burgeoning banking sector and GTBank’s stellar reputation for excellence. The listing significantly broadened GTBank’s investor base, bringing aboard institutional investors, asset managers, and sovereign wealth funds from across the globe. The capital raised enabled the bank to strengthen its balance sheet, invest in cutting-edge technology and infrastructure, and pursue strategic initiatives which consolidated its market leadership position and drove sustainable long-term growth. Till date, Guaranty Trust Bank’s GDR listing stands as a shining example of how African banks can leverage international capital markets to fuel their growth and expansion ambitions.

The success story that is “Guaranty Trust” is well documented, being the subject of three case studies and two brand surveys by the prestigious Harvard Business School in the United States and UK’s Cranfield University, respectively. Its leadership in the banking industry and efforts at empowering people and communities through its free business platforms has earned it many prestigious awards over the years, including being named “The Best Bank in Nigeria” by Euromoney, with the most recent award received in 2023 marking the 12th time it’s been so recognised by the premier global banking and financial markets authority. Announcing the award at the Euromoney Awards for Excellence 2023 , Euromoney stated: “Nigeria’s Best Bank, Guaranty Trust Bank, has continued to do a good job of convincing investors that it is better placed than its key competitors to deal with the risks ahead—and perhaps to take advantage of opportunities in economic and policy transition.”

Addressing the Shareholders at the AGM which was held at Oriental Hotel, Victoria Island, Lagos, on Thursday, May 9th 2024, Mr. Agbaje, in his usual eloquent and compelling mien, made the point that it was important that the Group began the process of recapitalization promptly to ensure full compliance with regulatory requirements well ahead of the timeframe set by the Central Bank of Nigeria (CBN). GTCO’s strong market positioning and unique value proposition guarantees that once the capital plan is concluded, investors can expect that the fresh capital will be utilised effectively to deliver optimum returns.

The CBN announced in March 2024 that commercial banks, merchant banks, and non-interest banks must meet significantly higher paid-in capital requirements (share capital plus share premium) by the first quarter of 2026. Under the new guidelines, commercial banks with international authorisation are required to have a minimum capital of ₦500 billion discounting shareholders’ funds. This move has been widely anticipated for some time, particularly in the face of the weakening naira. As outlined by the apex bank, higher capital buffers will enhance the resilience of Nigerian banks against adverse shocks, reduce the likelihood of systemic crises, and contribute to overall financial stability in the economy. Investors, both domestic and international, tend to have greater confidence in banks with strong capital positions. With higher capital reserves, banks can lend more confidently, supporting economic growth by providing credit to businesses and individuals. This will in turn stimulate investment, consumption, and overall economic activity.

For any who have been around the Nigerian financial landscape long enough, Segun Agbaje, and by extension the financial behemoth he has transformed the Guaranty Trust brand to today, is no stranger to remarkable feats even in the most challenging times. A visionary and strong leader, Mr. Agbaje is adept at thriving in adversity, turning challenges into opportunities for growth and success. His journey to becoming one of Africa’s leading CEOs is a testament to his resilience, creativity, and unwavering determination in the face of daunting odds. Segun Agbaje’s experience with previous successful capital raisings as well as ongoing exploits steering the organisation through rapid expansion into viable markets and restructuring to a Holding Company Structure with thriving business verticals as the Group Chief Executive will certainly be of advantage, one that positions GTCO Plc to outperform. Under Mr. Agbaje’s leadership, the current Management team and staff members at GTCO clearly have what it takes to execute the recapitalisation plan flawlessly and deliver sustained returns to shareholders whilst fulfilling the Group’s mandate of leading the future of financial services in Africa.