GTB HoldCo Status Delayed By Lack of Regulatory Approval

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Guaranty Trust Bank

Guaranty Trust Bank (GTBank) plans to list a new non-operating holding company (HoldCo) named Guaranty Trust Holding Company Plc by January 5, 2021 on the Nigerian Stock Exchange (NSE), is being delayed by a lack of regulatory approval as yet, sources familiar with the matter tell MoneyCentral.

“They are awaiting approval. I believe…they have intimated us and all relevant stakeholders are ready, but just waiting for regulatory approval to proceed,” a market source in the stock exchange where GTBank is currently listed told MoneyCentral.

The approvals for a change to Holding Company status would need to be obtained from the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC). The plans are for now in essence 2 months behind schedule.

The new HoldCo will become the ultimate parent of the Guaranty Trust Group (comprising the Bank, the Banking Subsidiaries and the Non-Banking Subsidiaries).

Under the terms of the Scheme and subject to the Conditions, the Scheme Shareholders will receive the same number of Holdco Shares in exchange for their current GTBank Shares (i.e. the Shares will be exchanged on a one-for-one basis).

Holders of Existing global depositary receipts (GDRs) will receive the same number of Holdco GDRs in exchange for their current Existing GDRs (i.e. the Existing GDRs will be exchanged on a one for-one basis).

Under the Scheme, it is proposed that the Scheme Shares be transferred to the Holdco.

In consideration for the said transfer, the Shareholders shall receive a total of 29,431,179,224 ordinary shares of 50 Kobo each in the Holdco, credited as fully paid, in exchange for a total of 29,431,179,224 ordinary shares of 50 Kobo each in GTBank held by the Scheme Shareholders as at the Terminal Date, which will be transferred to Holdco on the Effective Date.

In September 2010, the CBN issued the Regulation on the Scope of Banking Activities & Ancillary Matters, No. 3, 2010; with effect from November 15, 2010 (the Regulation 3), which repealed the Universal Banking Guidelines.

In compliance with the requirements of Regulation 3, the Directors of Guaranty Trust Bank (GTB) at the time made the strategic decision to divest from its non-banking enterprises in order to focus on growing its commercial banking activities.

This strategic decision resulted in the success of the Bank in Nigeria and across its Banking Subsidiaries over the last decade.

The Group grew its shareholders’ funds from N210.8 billion in 2010 to N720.9 billion as at June 30, 2020, closing with capital adequacy ratio of 22.9 percent.

The Group has remained profitable, growing profit before tax at a compounded annual growth rate of 16.3 percent from N48.5 billion in December 31, 2010 to N219.4 billion (annualised) in June 30, 2020.

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