GTB's Public Offer Opens Today
By Uche Obike and Tunyosola Ayansiji
The much awaited Guaranty Trust Bank Plc's (GTB) Offer for Subscription of one billion ordinary shares of 50 kobo each at N10.60 per share opened this morning.
The Offer document discloses that the Offer allows 30 per cent of the shares as preferential allotment to select portfolio investors.
The Offer will also be offered to investors at units of a minimum of 500 ordinary shares and multiples of 250 ordinary shares thereafter.
To further ensure that all Nigerians are given the opportunity to invest, Guaranty Trust announced that it will adopt a supplementary allotment procedure. Hence, in the event that the Offer is over-subscribed, excess monies will be capitalised and additional shares allotted to the extent that can be accommodated by the bank's unissued share capital.
After due approval from its teeming shareholders and the Nigerian Stock Exchange (NSE), the bank intends to raise the sum of N10.6 billion by offering the public one billion ordinary shares of 50k each at N10.60 per share.
The bank officials said the additional capital is to be used for branch expansion, technology and back office infrastructure.
Guaranty Trust bank shares have consistently performed well on the NSE, with return on investment in excess of 440 per cent in the last three years.
Amidst activities geared towards breaking the Offer, Guaranty Trust Bank has once again, retained its top industry triple A (Aaa) rating according to the latest Agusto & Co 2004 Bank Rating report.
Agusto & Co, Nigeria's leading research, credit rating, training and credit risk management agency has for nearly a decade, rated Nigerian companies and financial institutions. Its latest rating report, which expires at the end of July 2005, reaffirms its 2003 triple "A" rating of the 14-year-old bank and clearly marks out GTB as a well established player in the Nigerian banking industry.
This triple A (Aaa) rating reveals that GTB is a financial institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due. It also means that adverse changes in the environment whether they be macro-economic in nature, political or regulatory are unlikely to lead to a deterioration in the financial condition or an impairment of the ability of the bank to meet its obligations as and when they fall due.
GTB's principal strengths, according to the 2004 Agusto & Co report, are its strong industry position, strong asset and capital base, good and sustainable earnings and competent and stable management
"The rating of Guaranty Trust Bank reflects its sound financial condition, says the report, which goes on to add that "the rating is further enhanced by GTB's defensible banking franchise... Asset quality remains good with non-performing loans to total loans a low 2.7 per cent. This level is significantly lower than the banking industry average of 23 per cent and remarkably, one of the lowest in the entire industry... the bank fully provided for its problem loans as cumulative provision stood at 126 per cent of non-performing loans. This level was also better than the banking industry average coverage of 75 per cent."
Also, the analyst report notes that "GTB's sound capital base provides a good buffer against the bank's risk profile." It also highlights GTB's 'good profitability' with its pre-tax return on asset and equity at 3.9 per cent and 45 per cent respectively. These were higher than the industry average returns of 3.4 per cent and 38 per cent, respectively."
On the quality of GTB's personnel, the report notes that the bank's staff productivity is one of the highest in the Nigerian banking industry, with average cost per staff put at N2.4 million. This compares well with the bank's industry peers and better than the industry average of N1 million.
Selected along with six other banks by the Central Bank of Nigeria (CBN) in December 2003 to be a Settlement Bank. It plans to increase its paid up share capital by N10 billion via a public offer on the Nigerian Stock Exchange.
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