Digital banking stimulates GTBank’s target of 10% loan book
In its full year 2017 guidance, Guarantee Trust Bank plc (GTBank) plans to grow its loan book to 10 percent in the next five years, where digital banking would play a significant role towards achieving the target.
This is coming after the bank achieved 15.8 percent loan growth in its 2016 financial result. Having achieved 29.0 percent deposit growth, the bank looks forward to achieving 15 percent in 2017.
Segun Agbaje, managing director/CEO of the bank who disclosed this in Lagos at an interactive session with business editors also said the bank would achieve N168 billion Profit Before Tax in 2017 from the N165 billion position in 2016.
The bank’s Non-Performing Loan (NPL) to total loan which stood at 3.7 below the regulatory threshold is expected to remain below five percent in 2017.
Sharing with shareholders on how digital technologies have changed the banking sector competitive landscape, Agbaje noted that digital Technologies have dissolved the boundaries between industry sectors and Banking has not been spared from this disruption. “Non-bank digital players could become as integral in the banking value chain as we are to our customers, and competition from these non-bank players could erode as much as one-third of traditional retail banking revenues in the coming years”.
“As a Bank that intends to continue to win and dominate, we will need to move beyond our traditional role as enablers of financial transactions and providers of financial products, to playing a deeper role in the digital and commercial lives of our customers, building and positioning our Bank in the centre of an extended ecosystem that offers customers benefits, beyond banking. We are however, mindful of the inherent competitive advantages that we possess in the digital world and we have created new divisions and aligned our structure to ensure that we are positioned to take advantage of the opportunities birthed by the digital revolution”.
Agbaje further said, “We are investing and building our digital capabilities, and also actively seeking to collaborate with FinTech companies. Whether we compete or collaborate, we will be aggressively pursuing these digital opportunities to strengthen our traditional businesses, and going beyond being a bank to becoming a platform that enriches the lives of all the customers that it serves”.
In 2016, the bank posted strong capital ratios, where Capital adequacy ratio (CAR), computed under Basel II requirement remained strong at 19.8 percent despite increase in Risk Weighted Assets (RWA) for Credit Risk owing to impact of foreign exchange devaluation.
CAR at group level stood at 21 percent, well above the 15 percent regulatory limit. Others comprise of additional investments in subsidiaries, increase in intangible assets (software), deferred tax assets and changes in fair value reserve.
“Going into 2017, we know that challenges in our macroeconomic environment are likely to persist, but our commitment to staying positive, delivering exceptional financial services to our customers, and adding value to all stakeholders has never been stronger. With the repositioning of our business structures and significant investment in our digital abilities, we are confident in our capability to deliver differentiated products and services to our customers whilst enhancing cost-efficiency and reducing risk”, Agbaje added.