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GTBank maintains leading position as best bank in Nigeria; wins bank of the year, Sierra Leone

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Guaranty Trust Bank

Foremost African financial institution, Guaranty Trust Bank Plc has won the award for “Bank of the Year Nigeria” for the second year in a row at The Banker’s Bank of the Year Awards, regarded as the industry standard for excellence within the global banking sector. Guaranty Trust Bank Sierra Leone Ltd, a subsidiary of Guaranty Trust Bank Plc, was also recognized as the “Bank of the Year Sierra Leone” at the event, which held on November 29, 2018 at the Sheraton Grand London Park Lane, London, United Kingdom.

The Banker, a publication of the Financial Times, is the world’s leading monthly journal of records for the banking Industry, with over 90 years expertise in publishing developments in the banking industry in Africa and on the global scale. The Magazine’s Bank of the Year Awards celebrates leading financial institutions within the global banking sector who are setting new industry standards and driving innovation in financial services and customer experience.

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Receiving the award on behalf of the Bank, Segun Agbaje, Managing Director/CEO of GTBank said; “We are honoured to be recognized as the 2018 Bank of the Year in Nigeria and Sierra Leone. These awards serve as further motivation for us as we continue to go beyond traditional banking services by creating innovative digital services that are less about us as bank and more about our customers and how we empower them with everything that they need to better their lives.”

He further stated that “Our vision has always been to create an oasis in the financial services industry that leads, not only in earnings and returns on equity, but also in maintaining world class corporate governance standards and pushing the bounds in service delivery and customer experience. These awards reflect our sustained commitment towards this vision, which we will continue to pursue, driven by our passion for excellence and guided by our founding values of hard work, discipline and integrity.”

Alongside its record for consistent year-on-year growth, GTBank is widely regarded by industry watchers as a trailblazer in the banking industry due to its many innovations in digital and financial services. Recently, the Bank launched Habari, Nigeria’s largest platform for music, shopping and lifestyle content and the first mobile platform created by a financial institution in the country that focuses on enabling people’s needs and lifestyle rather than providing regular banking products.

Nairametrics often allows the usage of its website for businesses wishing to send out important press releases, articles and other communication forms of their products, services, events, employees, and personalities. Some of these articles are paid for.

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Companies

NAICOM gives insurance companies additional one year to recapitalise

In the meantime, the insurance companies are expected to meet at least half of the capital requirements by the end of 2020. The final deadline to fully recapitalise is September 2021. 

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NAICOM, Recapitalisation: 44 firms get NAICOM’s nod , NAICOM boss makes case for recapitalisation, insists the exercise will solidify insurance sector , NAICOM extends recapitalisation deadline for insurance companies to meet new capital base, Due to lack of ‘process’, NAICOM says no insurance firm has met recapitalisation requirement, Insurance: Recapitalisation exercise sets consolidation in motion, Insurance firms are reportedly selling off assets to meet NAICOM’s recapitalisation deadline, Insurance: NAICOM mulls extension of recapitalization exercise

The National Insurance Commission (NAICOM) has given insurance firms in the country one more year to meet the recapitalisation obligation that was recently set for them.

Apparently, it became imperative for NAICOM to set a new deadline for the recapitalisation process, considering how the Coronavirus pandemic has disrupted the activities of most companies, including the insurers. Bloomberg quoted the insurance regulator to have said that “the incidences of COVID-19 pandemic have made it difficult to proceed with the Dec. 31, 2020 recapitalization deadline.”

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In the meantime, the insurance companies are expected to meet at least half of the capital requirements by the end of 2020. The final deadline to fully recapitalise is September 2021.

Recall that Nairametrics had reported in April about NAICOM considering the extension of the recapitalisation deadline. Now, it has finally happened. And this is the third time an extension has been implemented since the recapitalisation programme was first announced in May 2019. Prior to this time, NAICOM had extended it from June 30th, 2020 to December 31st, 2020.

The recapitalisation programme is requiring life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.

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READ MORE: If you experience these signs then know your salary is not enough

The regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.

Nairametrics had reported that some insurance companies have been struggling to meet these requirements. There were also wide-spread speculations over possible mergers/acquisitions in the insurance sector. At the moment, only the top insurance firms have been able to meet the capital requirements. The deadline extension is, therefore, expected to help them comply.

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Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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Nigeria's banks, Account Maintenance Charges

Nigeria’s tier-1 banks — comprised of First Bank, UBA, GTBank, Access Bank, and Zenith Bank (FUGAZ) — generated a total of N18.4 billion from bank maintenance charges in Q1 2020. The sum is 17.12% more than N15.6 billion that was generated by the five banks during the comparable period in 2019.

This is according to recent checks by Nairametrics Research, a breakdown of which revealed that Zenith Bank generated the most income from account maintenance fees, followed by Access Bank and then, GTBank.

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See the breakdown below.

  • Zenith Bank Plc: N5.7 billion
  • Access Bank Plc: N3.9 billion
  • Guaranty Trust Bank Plc: N3.3 billion
  • First Bank Plc: N3.1 billion
  • United Bank for Africa Plc: N2.3 billion

READ MORE: Stocktaking: Ebenezer Onyeagwu’s year as CEO of Zenith bank

What you should know about account maintenance charges

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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According to the latest directive by the Central Bank of Nigeria on bank charges, Nigerian banks are allowed to charge their customers a “negotiable” N1 per mille. What this means is that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.

“Current Account Maintenance Fee (CAMF): Applicable to current accounts ONLY in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. Note that CAMF is not applicable to Savings Accounts,” said part of the CBN directive.

(READ THIS: You must know these terms if you want to own a bank account in Nigeria)

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Customers don’t like account maintenance charges

Interestingly, a lot of Nigerian bank customers are not keen on bank maintenance charges. After all, nobody likes to get debit alerts, especially so when such is coming from their banks. Perhaps, the main reason some customers dislike bank maintenance charges is because they tend to be higher than the interest capitalised entitled to such customers. Professor Ayobami Ojebode of the Department of  Communications and Language Arts, University of Ibadan, recently complained about this, saying:

“Dear bank, I see o! Don’t think I don’t see you! You credit me N50 interest on my savings and debit N150 for account maintenance & card fee etc! Come here, what do you really think you are doing?”

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Patricia
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MTN, Dangote Cement, Nestle, others top best dividend stocks in 2019

MTN Nigeria, Dangote Cement, Nestle Nigeria, Stanbic IBTC, GT bank and Zenith bank were the highest paying dividend stocks on the floor of the NSE in 2019. 

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Dividend payment is one of the very few ways available for investors to earn a constant stream of income. It is also the main reason shareholders hold unto their shares in a company. Therefore, it brings great satisfaction to investors when these companies declare dividends to their shareholders.

According to data gathered by Nairalytics, the research arm of Nairametrics, MTN Nigeria, Dangote Cement, Nestle Nigeria, Stanbic IBTC, GTBank, and Zenith bank were the highest paying dividend stocks on the floor of the Nigerian Stock Exchange in 2019.

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With a combined value of N691.23 billion, these six companies make up a diverse list that includes the telecommunication, food and beverage, industrial manufacturing, and banking sectors.

Here’s a breakdown

MTN Nigeria Communications Plc posted a total dividend per share of N7.92k (interim – N2.95k, Final – N4.97k), summing up to N161.21 billion. A dividend payment was made on May 19, 2020, to shareholders whose names appeared on the Register of Members as at April 17, 2020.

(READ MORE: Why these companies remain on NSE’s delisting radar)

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The telco giant’s revenue of N1.17 trillion in 2019 against N1.04 trillion in 2018 represents a 12.6% increase. Profit after tax (PAT) also increased significantly by 38.7% from N145.7 billion in 2018 to N202.1 billion in 2019.

MTN, MTN, Dangote Cement, Nestle, others top best dividends stock in 2019

Dangote Cement Plc declared a total dividend payout of N272.65 billion. This breaks down to every shareholder of the company earning N16 on every share held. A payment expected to be made after the company’s annual general meeting is scheduled for June 16, 2020, with a qualification date of May 25, 2020.

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It is worth noting that the cement manufacturing giant posted a profit after tax of N200.52 billion, a 48.6% decline when compared to a profit of N390.33 billion recorded  in 2018.

Nestle Nigeria Plc declared a total dividend of N70 per share to its shareholders, indicating a total payment of N55.49 billion. The leading consumer goods maker generated N284.04 billion in revenue for the year ended December 2019.

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The multinational’s profit after tax stood at N45.68 billion, a 6.22% increase compared to N43.01 billion posted in 2018.

Patricia

(READ MORE: List of Dividends announced so far in 2020 (May))

The management of Stanbic IBTC Holdings Plc proposed a total dividend per share of N3 (interim – N1 and final – N2) per ordinary share of 50 kobos each, which summed up to N31.57 billion. The interim dividends (N10.47 billion) was paid on October 3, 2019, while the final dividend of N21.01 billion is expected to be paid by June 18, 2020.

The bank’s full-year result shows that the group’s gross earnings increased by 5.2% from N222.36 billion in 2018 to N233.81 billion in 2019.

Stanbic IBTC’s profit after tax for the period  recorded a marginal increase of 0.8% to N75.04 billion compared to N74.44 billion in 2018.

Guaranty Trust Bank Plc declared a total of N82.41 billion to shareholders on March 30, 2020 as dividends for the year ended 2019. This indicates a total dividend payment of N2.8 per 50 kobo ordinary shares to shareholders. Final dividend was paid on March 30, 2020 to shareholders whose names were registered in the company’s register of members as at March 18, 2020 which was the qualification date.

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GTBank, which is Nigeria’s most capitalized bank, posted a profit after tax of N196.85 billion, showing a 6.5% increase compared to N184.71 billion recorded in the preceding year.

GTBank declares dividend payment for FY 2019

GTBank

Zenith Bank Plc also paid N2.8 dividends per ordinary share to its shareholders, summing up to N87.91 billion (interim – N9.42 billion, Final – N78.49 billion) for the year ended 2019. The bank posted profit after tax (PAT) of N208.84 billion in the year under review.

(READ MORE: CFOs of FUGAZ and their 3-year performance record)

The final dividends were paid to Shareholder in March 2020 whose names appeared in the Register of Members as at close of business on 9th March 2020.

What is dividend?

A dividend is a payment by a company to its shareholders, which is paid at the end of a quarter or year. Note that dividends are usually cash payments, although they can sometimes be paid out in company stock.

(READ MORE: NSE Set to Host Sustainable Capital Markets Forum to Promote Green Finance in West Africa)

What to look out for in dividend stocks

The following are what you should look out for in dividend stocks:

Payout Ratio: The dividend payout ratio is the percentage of a company’s earnings it uses in paying out dividends. This is an important metric to use when digging into dividend stocks you are considering to buy.

Dividend History: This is simple. All a potential investor needs to do is to check the track record of the company. Many of the companies mentioned above have trackable and impressive track records, including long records of paying annual and interim dividends.

Industry Strength: Here, it is better to own shares in a decent company in a great and lucrative sector than owning shares of a great firm in a tough industry.

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