GTCO woes investors with continued profitability, impressive ROE

Guaranty Trust Holding Company has assured its investors of the continued profitability of the businesses under the Group, as well as impressive Return on Equity (ROE) citing the previous achievement of 253 percent ROE over the past ten years.

Speaking at the Nigerian Exchange Limited (NGX) during the Fact Behind the Offer presentation on Monday, Segun Agbaje, the Chief Executive Officer of GTCO, emphasized that the Group is dedicated and focused on maximizing shareholder value, noting that the board and management is addicted to profitability and efficiency and not just about the balance sheet.

“We don’t go out and just take money for the sake of it because we want size. We concentrate on profitability and efficiency. Our balance sheet could be three times what it is today but would be less profitable. The reason we’re so profitable is that we are a low-cost operator. Our cost of funds is about 1.4 per cent. Therefore, we can give you strong profitability,” he said.

He explained that with an average of 29 percent ROE in the past ten years, the company has exceeded expectations, especially with the nation’s economy, adding that the company had been consistent in dividend payments over the past 10 years.

Agbaje declared that the company the company would break the record of a billion dollars in profitability, noting that the company is moving in a very strong and the right direction. “There is no Nigerian company that has ever made a billion dollars in profit and we are going to be the first ones to give you that,” he said. 

Speaking on the offer for subscription, Agbaje said the company is issuing 9 million ordinary shares for subscription at N44.50 kobo per ordinary share.

Explaining how the proceeds would be used, Agbaje said N370 billion out of N400.5 billion of the total capital raised will be used for growth and expansion of the banking business with a plan to roll out more branches in the year 2025, while noting that with 35 million retail customers and 2.9 million SME customers, GTCO believes the Nigerian banking sector is still significantly underserved and hold huge potentials.

He added that the company would expand to new countries and grow existing subsidiaries like Ghana, Cote d’Ivoire, and Kenya, while being cautious of opening new subsidiaries.

He also explained that the group planned to double down on acquisitions in Asset Management and Pension Fund Administrations, having used the strategy to drive growth, noting that both subsidiaries account for 1.5 percent of the group’s revenues.

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