GTBank Begins Search for Agbaje’s Successor, to Adopt HoldCo Structure

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Managing Director/CEO of GTBank Plc, Mr. Segun Agbaje

Obinna Chima
Guaranty Trust Bank Plc (GTBank) has started the recruitment process for the role of its chief executive officer currently held by Mr. Segun Agbaje.
This followed the plan by the tier-1 bank to convert to holding company (HoldCo) structure by the first quarter of 2021.

Agbaje disclosed this during the bank’s half-year 2020 investor call yesterday.
Agbaje was appointed chief executive officer of GTBank in 2011. The Central Bank of Nigeria’s (CBN) tenure limit for bank CEOs is a maximum of 10 years.

Speaking on the succession plan, Agbaje explained: “What we are looking for now is a Managing Director for Guaranty Trust Bank Nigeria. The process has started and I have always told people that we have five Executive Directors and so all of them are going through a process at the moment.

“We are working with a consulting firm in the United Kingdom. We are looking at what we think the future would hold and what we think the Nigerian banking industry would look like.
“At the end of the process which would end at the beginning of the fourth quarter have a Managing Director for GTBank Nigeria. So, we are on track. So, succession to GTBank Nigeria is well under control.”

Earlier, while responding to questions from analysts, the bank CEO said the arrangement for a HoldCo was going on very well.
He explained that bank has been working towards securing all the necessary regulatory approvals such as from the Central Bank of Nigeria (SEC), the Securities and Exchange Commission (SEC) and in other regions.

“In terms of the work we are doing on it, the operational model for the HoldCo is set. You will have the centre, which is the controlling or holding company and you have a couple of business units. Operationally, what you would see is that in terms of HoldCo, we are going to do a one for one exchange, which means that the shares of GTBank would move up to the HoldCo.

“In terms of the bank, operationally we are going to split it into three: You will have Guaranty Trust Bank Nigeria; Guaranty Trust Bank East Africa, almost operating as a region and you will have Guaranty Trust Bank West Africa operating as a region.

“We would then have other business units. The business unit we are looking at commencing with would be Asset Management, a Pension Fund Administrator (PFA) and a payment company. Hopefully this week, we would put in our application for final approval for the payment company.

“For the asset management and the PFA, we are going through a due diligence on an entity as we speak and if we close, they would be together. I believe that we would be ready to go live with the HoldCo, hopefully by the first quarter of next year. Things are going well; we have all the advisers working and we are working on the operating model,” the bank CEO added.

Speaking on the bank’s financial performance, Agbaje expressed confidence to meet the full year expectations set earlier in the year and so maintained its guidance.

“We will try to deliver what we promised,” he said.
The bank plans to maintain its dividend policy, so hopes to pay out 45 to 50 per cent on dividends – in line with historic levels.
The bank plans to meet its full year 2020 loan growth expectations of 13 per cent.

The half year results showed that GTBank’s profit before tax (PBT) stood at N109.714 billion as at the end of June 2020, compared with the N115.787 billion recorded in the comparable period in 2019, while profit after tax (PAT) printed at N94.271 billion, down 4.9 per cent from N99.133 billion recorded in 2019.

GTBank recommended an interim dividend of 30 kobo per share same as what was paid the previous year,
Details of the results of GTBank also showed gross earnings of N150.48 billion, up from N146.5 billion in the corresponding period of 2019.Net interest income rose from N116.365 billion to N127.615 billion, while net fee and commission income fell from N33.843 billion to N22.294 billion. However, loans impairment charges jumped by 209 per cent from N2.186 billion to N6.77 billion.

Speaking further, Agbaje said: “From what we have seen in the third quarter, there has been a pick-up in activities. So, you see that account maintenance value is going down.

“Account maintenance which is an indication of the amount of the amount of velocity in volume going into your system is up. Even in terms of e-Business income, volume is up; USSD income is up 32 per cent and mobile banking is up about 58 per cent. So, what we are going to try to do is to make sure that the increase in volume.”
He said the bank cash reserves requirement (CRR) with the central bank as a per cent of its deposit as at the half year was 47 per cent.