Guaranty Trust Bank Plc held its 29th annual general meeting (AGM) in Lagos, yesterday, during which the company’s management, board, and shareholders deliberated on a number of important issues; including finances and dividends.
The event, which began at exactly 10 am as scheduled, was mostly moderated by the tier-1 bank’s Chairman, Mrs Osaretin A. Demuren.
She began by acknowledging the presence of every shareholder, board member, regulatory bodies, and journalist, before proceeding to draw attention to the register of shareholders, directors’ shareholdings, and directors’ meeting attendance. She said all were open for inspection.
She then introduced members of the company’s board, including Mr Haruna Musa, Mr J.M Lawal, and Mr Segun Agbaje, the company’s Chief Executive Officer.
The Chairman also introduced the representatives of several regulatory bodies that were present, including Mrs Lilian Dako who was there on behalf of the Nigerian Stock Exchange.
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The ordinary business and special business of the day
Moving on, the Company Secretary, Mr E. E. Obebeduo, read out the main agendas of the meeting. These included the consideration of the company’s audited financial reports for FY 2018, the consideration/approval of the company’s declared dividend for the year, as well as the election/re-election of directors.
The Chairman’s speech
According to Mrs Osaretin Demuren, she is honoured to serve as the Chairman of the tier-1 bank, which she described as having an unmatched record in the creation of value for its shareholders.
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She stated that the bank “recorded significant success in the year, despite the challenges in the operating environment and delivered a strong financial performance”.
She further commented that the company is committed to growing its business across the African continent, specifically in some “high growth African markets”. She revealed that in 2018, the company’s subsidiaries in nine African countries and the United Kingdom, contributed N26 billion to the overall profit before tax.
Summary of GTBank’s FY 2018 audited financial results
During the AGM, Mrs Obioma Uba, representing GTBank’s auditors — PricewaterhouseCoopers (PwC), gave a summary of the company’s audited full-year 2018 results. According to her, PwC focused on two important aspects of GTBank’s 2018 results. These are:
- Impairment of loans and advances to customers (N100.07 billion): Focus was on this area because of two reasons. According to Mrs Uba, these are: “the size of the loans and advances balance net of impairment (N1.26 trillion) and because it requires significant judgement in terms of the timing and amount recognise.”
Basically, what she meant is that about N100 billion worth of GTBank’s loans have gone bad. Clearly, this is a significant sum, even though it represents only about 10% of the bank’s total loan book (n1.26 trillion) for FY 2018.
Note that IFRS 9 requires banks to make provisions for both loans that have gone bad as well as those expected to go bad.
- The valuation of goodwill (N8.68 billion) is yet another key audit matter the auditors focused a lot on, according to Mrs Obioma. The reason is because of the “significant judgement involved in estimating the carrying amount of goodwill at the year end.
A brief overview of the company’s results: As Nairametrics earlier reported, Guaranty Trust Bank Plc reported gross earnings of N434.7 billion, marking a 3.7% growth compared to N419.2 billion reported in 2017.
Profit before tax grew by 9.13% to N215.59 billion compared to N197 billion in 2017. Profit after tax also grew by 10.1% to N184.64 billion in 2018, up from N167 billion in 2017.
Earnings per share increased from N5.94 in 2017 to N6.54 in 2018. This marks a 10.1% increase year on year.
External Consultants’ Appraisal of the bank
Note that Mrs Bunmi Akande, who represented Ernest & Young, gave an External Consultants’ Appraisal of GTBank and stated that the tier-1 bank “complied with the requirements of section 2.8.3 of the Central Bank of Nigeria (CBN) Revised Code of Corporate Governance” during the 2018 financial year.
Shareholders expressed satisfaction over the company’s impressive performance
Despite the recorded growth, the shareholders want the bank to do more towards ensuring that the company and its subsidiaries generate more profit for the shareholders.
Motions moved and adopted
As the GTBank annual general meeting was drawing to an end, the Chairman, Mrs Osaretin Demuren, moved a motion for the adoption of the 2018 audited report. This was seconded by a shareholder.
She also moved a motion for the adoption of the final dividend declared by the company. This was also seconded by the shareholders.
A third resolution was a motion to confirm the appointment of Mrs Miriam Chidebere Olusanya and Mr Babajide Gregory Oguntola as Directors of the company. This was seconded by the shareholders.
GTBank’s shareholders also confirmed the re-election of some Non-Executive Board members.