Report Sheet of Gatewaybank's Performance
Gatewaybank Plc Bank recorded appreciable growth in all its performance indicators for the year ended December 31, 2003.
This growth was boosted by the improvement in customer patronage in 2003 as indicated by gross earnings which leapt by 20 per cent, from N3.16 billion in 2002 to N3.79 billion in 2003.
The income growth was derived from foreign exchange, commissions, recoveries, and other incomes.
The interest expense paid by the bank for the year under review amounted to N1.27 billion, indicating a slight decrease of 1.5 per cent rise over the N1.29 billion of 2003.
Net interest margin (N1.92 billion) was however some 64 per cent more than previous year (N1.17 billion), while operating expenses which advanced by 44 per cent, from N1.02 billion to N1.47 billion consumed 38.8 per cent of gross earnings as against 32.3 per cent in the previous year.
Gateway bank's total assets grew by 21 percent, from N11.71 billion to N14.13 billion, loan and advances portfolio swelled by 31 percent from N4.03 billion to N5.27 billion, while shareholders' fund which shows the level of confidence the owners have in the bank advanced by 28 percent, from N1.7 billion to N2.17 billion.
In the same vein, pre-tax advanced by 7 per cent, from N702.2 million to N754.8 million, while post-tax profit leapt by 9 per cent, from N543.8 million to N590.9 million.
Further analysis of the bank's profitability shows that a margin of 15.59 per cent was made when expressed as a ratio of pre-tax profit to gross income. In other words, the bank made N15.59 in pre-tax profit from every N100 of the income it earned. This is however, 9.4 per cent less than the corresponding N17.21 pre-tax margin it made in 2002.
During the review year, Gatewaybank added a value of N1.56 billion to the national economy from the wealth it created and those of its employees.
However, 35 per cent or N539.77 million of the wealth created was utilised to pay employees salaries, wages and allowances, while 8 per cent or N120.5 million was used to pay providers of the capital (shareholders) dividend.
The sum of N75.8 million or 5 per cent was set aside for the Small and Medium Scales Enterprise (SMEs), N163.89 million or 10 per cent of the total wealth created was paid to government as taxes.
The sum of N268.7 million or 17 per cent was set aside for depreciation, 11 per cent or N177.2 million was transferred to statutory reserve, while profit amounting to N217.6 million, representing 14 per cent of the wealth created was transferred to general reserve.
During the review year (2003), loans and advances stood at N6.46 billion, indicating an increase of 30.4 per cent or N1.5 billion when compared with the N4.95 billion recorded in the previous year's operation.
An analysis of the bank's loan profile shows that N5.05 billion, representing 78.2 per cent are performing, while N1.4 billion, or 21.8 per cent are non-performing. Out of the non-performing loans, 1.75 per cent (N113.2 million) is classified as substandard, 6.6 per cent or (N429.9 million) was deemed doubtful while, 13.4 per cent (N86.7 million) were classified as lost.
An analysis of the pattern of loan disbursement shows that those maturing within one month was N875.4 million or 13.5 per cent of the total, while those maturing between one and three months was 21.58 per cent or N1.39 billion.
However, loans and advances maturing between three to six months was put at N2.13 billion or 33 per cent, while those maturing between six to 12 months amounted to N1.21 billion or 18.8 per cent.
Those maturing between one and three years accounted for N829.6 million or 12.93 per cent, while those maturing over three years were put at N11.37 million or 0.17 per cent.
Further analysis by security shows that 67.1 per cent or N4.34 billion was secured against real estate, 32.4 per cent or N2.1 billion 'otherwise secured', while 0.36 per cent or N23.7 million was unsecured.
An analysis of the bank's total deposits put at N8.65 billion shows that N2.4 billion, representing 27.7 per cent of the total are in demand deposits, N1.09 billion or 112.6 per cent are in savings, while N5.16 billion or 59.6 per cent are in time deposits.
Further analysis of these deposits show that those maturing under one month amounted to N3.49 billion or 40.36 per cent of the total, while those maturing between one and three months stood at N4.9 billion or 56.6 per cent. Those maturing between three to six months were put at N205.2 million or 2.3 per cent, while those maturing between six to 12 months amounted to N51.7 million or 0.59 per cent.
An analysis of the banks liabilities put at N3.19, which rose by 44. 1 per cent against that of 2002, shows that 15.9 per cent or N510 million are bills payable; 5.28 per cent or N168.9 million had to do with taxation; 2.5 per cent or N81.3 million are deferred payments, 14.3 per cent or N459.6 million are in foreign accounts deposit, while 9 per cent or N290.8 billion are sundry credit balances.
Further analysis indicates that 37.9 per cent or N1.2 billion are proposed dividends, while 11 per cent or N351.8 million are accrued expenses.
Speaking at the 13th Annual General Meeting (AGM) in Lagos last week, the Chairman of the bank, Chief. Samuel Adegbite, expressed happiness on the continuous improvement in the performance of the bank.
He attributed the impressive result of the bank to the quality of the board, management and staff.
"I commend the board, management and staff of the bank for good outing in spite of the tough and highly competitive operating environment", he said.
He announced to shareholders a total dividend of N120 million at the rate of 12 kobo for every N1.00 share held and a bonus of one share for every two held as at June 2, 2003.
The dividend, Adegbite said, was a major achievement when compared with last year's results.
He noted that the bank extended its services to the primary mortgage finance sub-sector in the course of 2003 through the acquisition of Partnership Savings and Loans Limited.
This, he said is to enable the bank tap into the vast opportunities in real estate activities.
On the future outlook of Gateway Bank, he affirmed that the bank will be poised to respond appropriately to challenges in the banking industry and will continue to develop new business areas and new product initiatives necessary to improve revenue base.
"Additionally, effective cost control and improvement in asset quality is expected to complement new business initiatives in order to maximise productivity and efficiency.
"We shall further pursue our growth strategy by opening new business offices in more locations nationwide to improve our reach and bring competitive financial services closer to existing and potential customers.
"The bank is about to conclude its change of name to emphasise the recent privatisation and further facilitate marketing activities. This is expected to invigorate our brand and enable strong market positioning.
"Your bank shall remain good corporate citizens by making positive contributions to the economic, social and educational aspects of our nation," he said.
Adegbite also reminded shareholders of the bank's efforts to capitalise and urge them to be partakers.
"The bank's growth strategy is coming well, while performance prospects are bright and strong. Everyone is invited to be partakers in this promising future.
"Following the approval of the shareholders at the 11th Annual General Meeting the bank will be going to the market with a rights issue of two for every five held by shareholders as at June 2, 2004," he said.
The increase, the chairman said "is expected to fund growth in branch network, acquisition of a befitting but modest head office property and other essential infrastructure that will position the bank favourably in the increasingly competitive market place."
Similar steps he explained," have been, or are being taken by virtually all respectable players in the market even ahead of the deadline on increase in capitalization of banks to N2 billion by the Central Bank of Nigeria (CBN)."
Gatewaybank Plc is a subsidiary of Associated Discount House Limited (ADHL), a company owned by a consortium of leading financial institutions. It was privatized in December 1999 when ADHL, the new core investor, acquired over 62 per cent of the bank's equity, and assumed board and management control a few months later.
The bank has an authorized share capital of N2 billion, of which N1.004 billion is fully paid, as well as a balance sheet figure of N14.1 billion.
The bank has over 31 business offices strategically located across the country, which operates on an on-line real, real-time basis - meaning that customers can deposit and withdraw money from any of the bank's branches irrespective of where accounts are domiciled.
Also warehoused by the bank is an array of innovative and diversified financial products. These include the A -Z Investment Scheme, GatewaySESA (Gateway Superior Earnings Savings Account), GatewayPASS (Gateway Professionals Advancement Support Scheme), and GatewayLIFE (an investment scheme designed for every responsible person who desires to retire to a happy and comfortable life after long years of work.
Gatewaybank is also in the course of concluding the maiden edition of its social responsibility initiative, Project Nigeria: A Future and a Hope which features 44 Nigerian Universities in a focused discourse and debate aimed at articulating a vision for a better Nigeria.
The opinion of the analyst is that the bank should maintain the steady growth in its income stream. When fully implemented, its new growth strategy would no doubt enhance its profitability. The bank should however, watch its non-performing assets.
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