SENTIMENTS at the Nigerian Stock Exchange, NSE, Friday remained dampened as the All-Share Index, ASI, and market capitalisation went down 0.70 percent to close the week at 25,328.07 points and N8.712 trillion respectively.
“Similarly, all other Indices finished lower during the week, with the exception of the NSE Oil/Gas Index and the NSE Pension Index that rose by 0.24 percent and 0.13 percent respectively, while the NSE ASeM closed flat,” the NSE weekly stock market report affirmed.
At end of the week’s session, the NSE reported a turnover of 1.111 billion shares worth N6.201 billion in 15,315 deals were traded by investors on the floor of domestic bourse compared to a total of 1.262 billion shares valued at N6.427 billion that exchanged hands last week in 12,274 deals.
It said the Financial Services Industry (measured by volume) led the activity chart with 950.921 million shares valued at N3.675 billion traded in 10,757 deals; thus contributing 85.58 percent and 59.25 percent to the total equity turnover volume and value respectively.
This is followed by the Conglomerates Industry with 60.977 million shares worth N79.922 million in 591 deals. Thirdly is the Consumer Goods Industry with a turnover of 40.270 million shares worth N1.696 billion in 1,774 deals.
The NSE reported that trading in the shares of lenders, Guaranty Trust Bank, FCMB Group Plc and insurer, Equity Assurance Plc.(measured by volume) accounted for 362.484 million shares worth N2.020 billion in 1,942 deals, contributing 32.62 percent and 32.57 percent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 24,200 units of Exchange Traded Products, ETPs, valued at N621,286 executed in 26 deals, compared with a total of 25,738 units valued at N522,245 transacted last week in 39 deals, the NSE weekly stock market report affirmed.
In terms of bonds a total of 6,908 units of Federal Government Bonds valued at N7.739 million were traded in 7 deals compared to a total of 22,030 units of Federal and State Government Bonds valued at N25.368 million transacted last week in 8 deals.
A summary of price changes in the review week shows that 27 equities gained in price during the week, higher than 24 recorded the previous week. On the flipside, 40 equities lost in price, higher than 37 posted last week, while 122 equities remained unchanged lower than 128 declared in the previous week.
Etranzact International Plc emerged the weekly top gainer with a gain of 0.72 kobo per share; while Ashaka Cement Plc topped the weekly losers chart with a loss of N3.24 per share.
Managing Director, GTBank, Mr. Segun Agbaje For increasing shareholders value on investment through robust dividend payout and adherence to corporate governance principles, shareholders’ of Guaranty Trust Bank Plc, commended the company’s board on its 2015 performance, as they approved a dividend of N1.52kobo per share.
The company had earlier paid an interim dividend of N0.25 kobo, and a final dividend of N1.52 kobo, making a total dividend payout of N1.77 per share for the year 2015. The shareholders, who spoke at the company’s 26th yearly general meeting in Lagos on, applauded the management for the impressive performance and efficient running of the company, amid harsh economic environment.
Specifically, the General Secretary of the Independent Shareholders Association of Nigeria, ISAN, Adebayo Adeleke expressed satisfaction with the state of affairs in the bank, especially for abiding by strict corporate governance principles.
Adebayo attributed the improved performance recorded by the bank to non-exposure to public sector fund, as well as the bank diversification to retail banking. “The bank is doing extremely well we have had course to look at their account with our own research desk in ISAN and we look at all the parameters, the bank is very healthy and i think it is attributable that over a very long period of time, they have stayed away from public sector fund so they have been able to survive.
“All these issues of returning single treasury account money bank to government did not have any serious impact on the account of GTB the public sector money they had was less than 2.3 per cent. They are actually taking banking as banking. “We had told them that this is a high profile bank and why don’t you diversify to retail and now you can see that more than 10 per cent of their operations is coming from retail which shows that they are also expanding more and more retail outlets are being used. So when you look at their balance sheet, you look at their net loan provisioning, you look at all the parameter, GTB stand it all,” he added.
The National Chairman, Progressive Shareholders Association of Nigeria, Boniface Okezie expressed satisfaction with the state of affairs in the bank especially for abiding by strict corporate governance principles. He berated the Central Bank of Nigeria, CBN, especially the Asset Management Company of Nigeria, AMCON, for its reforms programmes which failed to take into consideration the plight of shareholders and the harsh economic situation in the country.
According to him, AMCON reforms in the banking industry, rather than improve the lot of shareholders has become a ‘nightmare’ for investors in the financial services industry. “We commend the management of the bank for their prudent management of the affairs of the banks, in spite of the reforms of AMCON, which has impacted negatively on the economy and which is causing untold hardship for shareholders.
The Chairman of the bank, Mrs. Osaretin Demuren explained that the bank’s audited result for the full year ended December 31, 2015, showed gross earnings of N301.9billion an increase of 8.4 per cent from the N278.5 billion recorded in the same period of 2014.
The Group profit before tax stood at N120.7billion, an increase of N4.3billion or 3.7 per cent over the N116.4billion reported in December 2014.Its profit after tax also rose from N94.4 billion in 2014 to N99.4 billion during the period under review. According to her, its balance sheet remained strong with 7.2 per cent growth in total assets, from N2.36trillion in 2014 to N2.52trillion in the year under review. Loans to customers grew by 7.5 per cent to close at N1.37trillion from N1.28trillion in 2014.
She pointed out that despite the implementation of the Treasury Single Account, TSA, by the FGN, customer deposits remained relatively stable with a marginal year-on-year decline of 0.49 per cent from N1.62trillion in 2014 to N1.61trillion in 2015.
“As a Bank, we will continue to actively partner with our customers and grow our business in a sustainable manner that is not only driven by profit objective, but with an increased focus on empowering our customers with a view to growing Nigerian economy. Also, we remain committed to maximising shareholders’ value and delivering superior and sustainable returns whilst actively expanding our franchise in select, high growth African markets where we believe we have a competitive advantage,” she added.
In recent years, the Annual General Meeting of Guaranty Trust Bank Plc have been a celebration of what remains the most profitable banking operation in Nigeria. This brand equity has been exported to make the bank a successful international brand. At present the number of foreign subsidiaries with the bank’s Group is 10 with total investment of about N40billion. GTB plans to continue with this growing trend in its global strategy.
Some few years ago, some researchers at the University of Lagos conducted a study to find out if certain corporate governance variables are significant predictors of bank performance in Nigeria. As part of the accompaniments of the research outcome, it was found that Guaranty Trust Bank came out top as one the best governed banks in Nigeria and this was significant in explaining the corresponding top rate performance achieved by the bank over the years.
Remarkably it has continued with this tradition of implementing best practice governance in areas of board composition and oversight, executive compensation, financial reporting, shareholder relations, corporate social responsibility, internal control, procedures and compliance. The Board is composed of very reputable and distinguished professionals including 2 key independent Directors. Three different Committees of the Board are instituted to make policies and oversight the risk Management function alone in a bid to ensure maximum integrity.
A system also exists whereby the control function is decentralized and attached to every business area to minimize incidences of transaction errors and malfeasance. This is complemented by a whistle blowing policy backed with an effective response system. The Board Risk Committee performs important duties of overseeing the operational risks function by ensuring that relevant policies are adequately complied with and that appropriate mitigants are in place.
GTB, by all measures qualify as one of the top 3 capitalized banks in Nigeria. As at 31stDecember 2014, the bank operated with a shareholdersfund of N369billion, the third highest ‘in the industry for the year, up from N329billion. Obviously, the bank is ever conscious of the level and coverage of capital base and has used internal and external means to shore it up at a pace that surpasses the average industry growth rate.
In fact, some seven years earlier, when equity capital closed at N47.4billion, the bank ranked about 8th in the absolute level of capitalization. As it worked to increase the size of business risk and ascend to the top of performance ladder in the industry, the board and management consistently monitors how adequate capital is to provide cushions for new businesses in ways that meet both regulatory and prudential requirements.
A measure of how the bank improved in coverage of capitalization can be gleaned from our analysts measure of relationship between shareholders’ fund and estimated Naira size of risk asset portfolio. Our analysts pitched this at 18% in 2007, when the bank ranked about 13th by this measure.
In 2014, it estimated this at 25% with the bank occupying a position in the top 4 of the industry. Clearly the bank had substantial leverage to continue business expansion even if capital remains at present level. With regulatory capital to risk assets requirement of 15%, we consider that on the minimum, risk asset expansion of about N900billion would not dent the adequacy of existing capital, all things being equal.
GTB is no doubt one of the top 3 banks actively financing the economy through different forms of loans. As at 31s December 2014, total loans outstanding was about N1.2trillion. it was just N121billion in 2007 when the bank occupied the 8th position in the industry. Notwithstanding, this massive exposure growth, strict risk governance standards had consistently kept non performing loan ratios below 5% in the last 10 years. The ratio remained at 5% in 2013 and 2014 even as gross loan grew from N947billion to N1.2trillion.
To underscore the desire of the bank to continue to maintain bespoke quality in risk assets and consistently satisfy regulators, the bank invested in two software to drive credit risk management and reporting, namely the Lead to Loan and OFSAA Basel II solutions. These softwares are robust in headline customer profiles, rating assessment, disbursement, recovery and documentation among others.
Over the years Guaranty Trust Bank enjoyed the advantage of customers’ flight to safety. This worked with design of innovative liability products which enabled the bank to steadily increase deposit. As at 31st December 2014, traditional customers’ deposits were as high as N1.44trillion. One of the factors that have encouraged customers to deposit their money with the bank would appear to be the conviction that their funds are not at risk and that the bank would be able to meet obligations at all times.

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