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Financial Services

GTBank obtains approval-in-principle from CBN to operate as financial holding company

GTBank has obtained an approval-in-principle from the CBN to operate as a financial holding company.

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GTB releases FY result for 2019, grows PBT by 7.5%, GT bank obtains approval-in-principle from CBN to operate as Holding Company

Guaranty Trust Bank Plc announced that it has obtained an approval-in-principle from the Central bank of Nigeria (CBN) to operate as a financial holding company.

This disclosure was made by the Board of Guaranty Trust Bank Plc in a press release sent to the Nigerian Stock Exchange.

READ: Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices

The press release partly reads,

“Guaranty Trust Bank plc (GTBank or the Bank) is pleased to announce that it has obtained the approval-in-principle of the Central Bank of Nigeria (the CBN) to commence the formal process of the reorganization of the Bank to a financial holding company (The Restructuring), which will be implemented by means of a scheme of arrangement between the Bank and its shareholders pursuant to the Companies and Allied Matters Act (the Scheme).”

However, the bank also obtained the “No-objection” of the Securities & Exchange Commission  (SEC) in connection with the proposed Scheme.

READ MORE: GTBank Plc to consider a holding company structure

What you should know

Nairametrics reported in March that the Chief Executive Officer of Guaranty Trust Bank Plc (GTB), Segun Agbaje, disclosed that the tier-1 bank is currently considering a holding company structure.

Agbaje during the company’s earnings call as of the time of the report in March, disclosed that a holding company structure will enable the bank to keep up with the latest trends in the Nigerian financial services industry.

(READ MORE: GT Bank to reveal new MD/CEO pick by October)

Overview of the restructuring

Under the Restructuring, it is proposed that the issued shares of the Bank will be exchanged on a one-for-one basis for the shares in a financial holding company. The Bank’s existing Global Depositary Receipts (GDRs) are also proposed to be exchanged on a one-for-one basis for new GDRs to be issued by the financial holding company.

Subject to the approval of the Scheme by the Bank’s shareholders, the relevant regulatory authorities, and the Federal High Court of Nigeria; the holding company will have an organizational structure that is used by a significant number of major financial institutions globally.

READ: GTBank revenue for H1, 2020 rises to N225.14 billion

What to expect

The financial holding company will be regulated by the CBN as the Other Financial Institution and listed on the Official List of The Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE).

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Concurrently, the Bank will be delisted from the Official List of the NSE and the LSE and re-registered as a private liability company under the relevant provisions of Nigeria’s corporate legislation.

READ: Access Bank, First Bank up, investors gain N747 billion W/W

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However, the bank will continue to be subject to the full suite of CBN banking regulations.

 

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Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

4 Comments

4 Comments

  1. Akapo Oluwaseun Reuben

    November 6, 2020 at 1:05 am

    Wow,congratulations to GTBANK,I’m so Happy for you, GTBANK KEEP GROWING HIGHER AMEN.

    • buba

      December 1, 2020 at 4:22 pm

      are you sure this is a good news for the investors? the company’s shares are down almost 4% today

  2. Sodiq

    November 6, 2020 at 7:32 am

    Pls am using GTB na money I need 0528856818 amusat sodiq akinkunmi GTB

  3. Francis

    November 6, 2020 at 3:22 pm

    So in essence, what does this mean. Is there gonna change in operation? Is it something that will affects the account holders with GTb? Or it’s just about the organization and it’s market

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Financial Services

Growing performances demands have necessitated Bank’s Balance Sheet Management practices – CWG Plc

Balance Sheet Management practices Is needed to embrace advanced platforms and technologies.

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CWG Plc

CWG Plc has stated that the growing demand by banks to improve performances, increase transparency and comply with complex regulations has necessitated Balance Sheet Management practices to embrace advanced platforms and technologies.

The platforms are expected to provide greater data navigation and analytic capabilities to manage Risk, Returns & Capital.

This was disclosed by Business Director, FSI, Abayomi Olomu, in a statement issued by CWG Plc ahead of its Balance Sheet of the Future: Risk-Data-Analytics Conference on Wednesday.

READ: How the CBN sourced the $25 billion (N10 trillion) it lent the FG

According to him, the conference, which is organised in partnership with Surya software, a global Financial Control & Risk Management solution provider, will host key players in the Banking and Financial Services industry.

He said, “There is need to explore the role of Balance Sheet Management and Asset Liability Management in future considering the volatile and dynamic markets and how technology can be leveraged to manage these areas.  

”Banks have increased demands to improve performance, increase transparency and comply with newer and complex regulations. 

“These growing demands have necessitated Bank’s Balance Sheet Management practices to embrace advanced platforms and technologies that provide greater data navigation and analytic capabilities to manage its Risk, Returns & Capital.” 

READ: What banks can do to improve Real Sector Lending in 2021

He added that the ‘Balance Sheet of the Future’ conference amplifies CWG and Surya software’s commitment to deploy versatile solutions and technology platforms within the Nigerian and Ghanaian Financial Services market.

What you should know

The keynote address of the event will be delivered by Her Excellency, Zainab S. Ahmed, Honourable Minister of Finance, Budget & National Planning. There will be a guest address from Mr Pravat Dash, Senior VP – Head of Market Risk, Axis Bank which is one of the top private sector banks in India.

Some of the thought leaders from the Nigerian Banking and Financial Industry will also participate in the conference to discuss and share their views on the subject matter.

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Financial Services

Amid sell-off, FUGAZ investors lose N34.68 billion in a single trading session

Market capitalization of the top five banks dropped to N2.52 trillion as at close of business on the 4th of March 2021.

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FUGAZ Banks, loans, loan, Access, Zenith, GTBank, top actively traded stocks on Monday , FUGAZ lead actively traded stocks as bourse ups 1.7%, Nigeria’s top 5 banks spent more than N40 billion on adverts in 2019

Investors in the elite banks in Nigeria- FBNH, UBA, GTB, Access and Zenith have lost a total of N34.68 billion in a single trading session, amid sell-offs.

According to data from the Nigerian Stock Exchange (NSE), the market capitalization of the top five banks dropped to N2.52 trillion as at close of business on the 4th of March 2021, shedding about 1.6% in a single trading session.

The loss is due to downward pressure on the share prices of the elite banks, evident by the sell-off witnessed in the market. A snapshot of how much each bank lost and the impact is succinctly captured below;

READ: Investors lose N352bn during NSE’s eight days of losing streak

UBA

The United Bank for Africa investors lost a total of N10.26 billion after its market capitalization dropped from N282.15 billion to N271.9 billion as at close of business yesterday.

The drop is due to a sharp decline in its share price which closed at N7.95, shedding about 3.64% in a day.

Investors cashed in on the decline to trade about 26,782,197 units of the Bank’s shares valued at N211, 571,939.35, placing the bank as the fourth most traded stock at the NSE. The volume of shares traded by the bank rose astronomically by 201.9%, when compared to 8.87 million units traded the previous day.

On the other hand, it is pertinent to note that the United Bank for Africa (UBA) is yet to release its audited FY 2020 result.

READ: United Bank for Africa provides $200 million for Nigeria’s Petroleum Industry – Timely financing for Post COVID economic growth

Access Bank

Access Bank Nigeria Plc lost a total of N8.89 billion after its market capitalization dropped from N286.14 billion to N277.25 billion. The loss is due to a decline in its share price from N8.05 to N7.80, indicating a dip of 3.11%.

Just like UBA, Access Bank investors traded a total of 21,586,491 units valued at N168, 090,266.60, placing it as the fifth most traded stock at the NSE today. In lieu of this, Access Bank stock volume appreciated by 229.1%, from 6.56 million traded yesterday.

Access Bank is yet to release its audited financial statements for FY 2020.

READ: Oando share price up by 10% off the back of court ruling

Zenith Bank

Zenith Bank investors lost a total of N7.85 billion after market capitalization dropped to N794.3 billion today. The marginal drop is due to a slight dip in the firm’s share price, from N25.5 traded yesterday to N25.30 as at close of business, indicating a decline of 0.98%.

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Investors reacted to this drop by trading 38,647,711 units of the bank’s shares valued at N983, 251,467.75, placing the firm as the second most traded stock at the NSE market.

The drop in the market value of Zenith shares is in contrast to what was obtained last week, when investors gained a total of N37.7 billion, the highest recorded by the bank since the famous circuit breaker. The gains were sequel to an impressive financial performance by the firm for FY 2020, after it recorded a PAT of N230.6 billion and declared a final dividend of N2.70 per share.

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FBNH

FBNH investors lost N1.8 billion after its market capitalization declined to N253.06 billion as at the close of business. The drop was due to a 0.7% decline in its share price from N7.1 traded earlier to N7.05.

In lieu of this, a total of 31,253,644 units of the bank’s shares valued at N983, 251,467.75 were traded, placing the firm’s stock as the third most traded stock at NSE. The total volume traded surged by 88.9%, from a total of 16.54 million traded a day earlier.

FBNH had earlier declared a Profit After Tax figures of N79.71 billion for FY 2020, indicating an increase of 8.2% YoY.

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GTB

GTB investors lost a total of N5.89 billion, following a drop in its market capitalization from N932.97 billion to N927.08 billion. The drop was due to a 0.63% decline in share price which closed at N31.50.

It is pertinent to note that GTB is yet to release its audited financial statement for FY 2020.

What you should know

  • The Nigerian Stock Exchange ended on a bearish note on Wednesday, March 4, 2021 after the ASI declined by 0.40% to close at 39,364.67 index points.
  • On a general note, investors lost a total of N82.35 billion, with FUGAZ accounting for 42.11% of the loss.

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