Guaranty Trust Bank Plc, the largest lender by market value in Africa’s largest economy, has deployed its talented workforce in generating higher profit than peer rivals.
Guaranty Trust Bank employs 3,482 people – the lowest workforce among Tier 1 lenders- still makes N27.07 million per employee. This means that the lender is efficient in translating employee headcount and productivity into profitability.
That contracts with Zenith Bank, which has total work force of 6,521 people, and generates N15.92 million per employee. Access Bank employs 5,576 people, and makes N10.94 million per worker.
Also, United Bank for Africa (UBA) hired 11,200 people and generated N3.96 million per employee.
Profit per employee is calculated by dividing the last twelve months (LTM) of a company’s net income by the company’s number of full-time employees.
Undoubtedly, Guaranty Trust Bank has turned the talent in the organization into value for customers, which means it has become more efficient in the use of advanced technology.
Analysts that spoke to Money Central said the largest lender by market value has very few office branches across the country compared to peers, and that each centre is increasingly contributing to Group’s profit.
Little wonder Equity research firm Renaissance Capital said in a recent report their top banking stock pick in Nigeria is Guaranty Trust Bank because of the high quality of its earnings.
Attractive valuations based on low price to earnings ratio and low dividend yield makes the stock worth holding during this period of macroeconomic uncertainties.
Data gathered by MoneyCentral shows Guaranty Trust Bank has managed to deliver robust returns to investors during the same the period under review than peer rivals.
For instance,GTB generated a return on average equity of 26 percent, which compares to Zenith, (23.30 percent), Access, (+15.10 percent), UBA, (12.10 percent), and FirstBank Holdings, (11.80 percent).
A higher ROE is taken as the management’s ability to generate better income from equity.
Because Guaranty Trust Bank has continued to have a strong ROE on a consistent basis, it is able to generate significantly high return on capital over long periods of time under different circumstances.
Nigeria banks are reeling from punitive regulatory environment that undermined interest and non interest income.
Also, the coronavirus pandemic headwind was an unexpected shock that led to rising impairment charge as default rate spiked.