Segun Agbaje, is the Group CEO of Guaranty Trust Holding Company’s (GTCO), Nigeria’s largest bank by profit and market capitalization, so when he speaks the market is sure to listen.
Agbaje on Monday slammed the idea of GTCO expanding to South Africa.
“South Africa is a mature market, All the South African companies making money are making them from Nigeria. So I am not going to South Africa to look to make money, when they are coming here to make money,” Agbaje said at a “Facts Behind the Offer” presentation to investors, at the NGX, seen by MoneyCentral.
“I am really not interested in South Africa. I operate within what I consider growth economies; I am not going into any mature economy with all due respect.”
Access Bank losing billions in South Africa
Agbaje’s comments could be read as a dig at tier-one rival Access Bank which is the only major Nigerian bank with operations in South Africa.
Despite capital injections of Zar1.4bln (N115 billion) by Access holdings, since its acquisition of Access Bank South Africa in 2021, persistent losses have continued for the subsidiary.
GCR a ratings agency forecasts a financial loss at year end 2024 for Access Bank South Africa, after the firm recorded losses in 2023.
Access Bank South Africa Limited is the 24th (out of 30) largest regulated banks in South Africa, with a market share across assets, loans and deposits of less than 0.1%.
Capitalisation is expected to deteriorate in the short to medium term and Access Bank South Africa is expected to return to shareholders or the market to increase capital soon.
Access Bank South Africa has delayed its audited financial reporting for 2022 (and the knock-on effect in 2023, the bank anticipates finalisation of the accounts by end July 2024) due to the change in core banking systems has caused a significant gap in transparency in comparison to peers.
The bank is currently in breach of two information covenants (single obligor and late annual financial statement submission) with an international multilateral, according to GCR.
GTCO leads Nigeria’s banking sector
Guaranty Trust Holding Company (GTCO) overtook peer rival Zenith Bank Plc to become the largest lender by profit in the first quarter (Q1) of 2024.
Still the most efficient lender because of its strong return on average equity (ROAE) and low cost to income ratio, GTCO recorded 685.90 percent uptick in profit after tax (PAT) to N457.13 billion as at March 2024.
That compares with Zenith Bank’s Q1, 2024 profit of N258.13 billion; Access Bank, N159.28 billion, and United Bank for Africa (UBA), N142.58 billion.
GTCO has a market capitalisation of N1.339 trillion and price to book value of 0.67x showing immense value.
Overall, the Group continues to post one of the best metrics in the Nigerian financial services industry in terms of key financial ratios i.e., pre-tax return on equity (ROAE) of 117.0%, pre-tax return on assets (ROAA) of 18.0%, full impact capital adequacy ratio (CAR) of 24.9% and cost-to-income ratio (CIR) of 16.3%.
GTCO is a leading financial services group with banking operations in Nigeria, West Africa, East Africa, and the United Kingdom alongside non-banking verticals in HabariPay, Guaranty Trust Fund Managers, and Guaranty Trust Pension Managers. Its leadership in the banking industry and efforts at empowering people and communities has earned it many prestigious awards over the years.
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