GTB Unfolds Plan to Meet New Capital Base
Investment
From Kunle Aderinokun in Abuja
Guaranty Trust Bank Plc (GTB) yesterday assured its shareholders and customers that it would meet the Central Bank of Nigeria (CBN's) December 31, 2005 deadline for banks to shore up their capitalize base to N25 billion. It also unfolded plans to have 100 new branches nationwide within the next three to five years.
Deputy Managing Director, Mr. Segun Agbaje said yesterday in Abuja at the bank's Investors' Forum on the on-going public offers that GTB has positioned itself to meet the new capital base deadline.
He explained that the bank expects to realise about N10 billion from its public offer of 1 billion ordinary shares of 50 kobo at N10.60 per share, which when added to the bank's present capital base of N12 billion would gross N22 billion. The balance of N3 billion, he added would be drawn from the statutory reserve on profit without any strain to the bank.
He described the decision to increase banks' capital base to N25 billion as logical stressing that "it will make Nigerian banks stronger and competitive globally".
The N25 billion target he added was achievable in Nigeria considering that similar target was met by Malaysian banks within 12 months. He however admitted that there would be job loses arising from the expected mergers and acquisition of banks.
CBN governor, Professor Charles Soludo had on Tuesday directed banks to recapitalize to the tune of N25 billion. He stressed that "only the banks that meet the N25 billion capital base requirement will hold public sector deposits and participates in the Dutch Auction System (DAS) transaction by end of 2005". Agbaje disclosed that GTB would embark on an aggressive growth regime with off-shore branches as one of its targets. "Our goal is to provide multiple delivery channels to the banking public, in which we hope to become one of the three largest banks in the country. Our aggressive strategic expansion programme will continue over the short to medium term. "The bank's branch network is designed to exploit opportunities in designated markets and will necessarily become profit centers within a relatively short period of time," he said.
The proceeds from the offer he stated, would be used for expansion of its branch network as well as for regional expansion programme. He added that the proceeds would also be used to enhance information technology infrastructure and provide sufficient working capital to meet its immediate and foreseeable requirements.
The deputy managing director said the bank would spend the sum of N3.2 billion on branch expansion, N3.2 billion on working capital, N1.6 billion on information technology, N1.6 billion on regional expansion and N400 million on universal banking.
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