Why We're Acquiring Inland Bank, By GTB
New deal raises capital base to N40bn
From Ayodele Aminu in Lagos and Kunle Aderinokun in Abuja
Guaranty Trust Bank Plc has confirmed its acquisition of Inland Bank Plc and said the move is geared towards leveraging on the N34 billion capital base it achieved through the just-concluded public offer.
Managing Director, Guaranty Trust Bank Plc., Mr. Tayo Aderinokun, made this known yesterday in Abuja after signing a Memorandum of Understanding (MOU) with Inland Bank.
Specifically, he said the new development is to maximize returns on GTB's current capital base.
"At a time we had N5 billion, N6 billion profit after tax in a year. And you know that our shareholders are used to getting returns at certain level. At N34 billion capital base the expectation is that we still maintain the same returns. In order to do that we'll need to expand the operations and we believe that the best way of expanding operations is through branching, so that we have more outlets," he explained.
Given this scenario, GTB, he said, had to look for an organization that has outlets that complement what it has.
"We are very strong in the southern part of the country, the east and the west. Not as strong in the north. Inland is quite strong and has a fairly large branch network -44 branches, about our size. We decided that there is benefit to this our consolidation and we started negotiation and that is why we are here. The reason really is to ensure that GTB has a totally nationwide coverage and enough outlets to be able to effectively utilize the N34 billion of capital which we now have," he added.
According to him, "This is a good fit. We are delighted as this acquisition gives us deeper access into several areas of the market and allows us to continue to provide GTB's superior quality service to a broader spectrum of the market."
THISDAY had yesterday exclusively reported that GTB had acquired Inland Bank with a view to bring about a bank with strong branch network across the country.
The banks after signing the MOU yesterday approached the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) to intimate them of the deal.
On the compatibility of the two banks, Aderinokun pointed out that differences do exist between two persons but that the differences should be a source of strength.
"Differences should be a source of strength instead of something that would tear you apart. People now look at the same issue in different ways and the challenge of management is to marry both and get the best out of it.
"I don't see any major corporate difference. Inland Bank is a bank that is very well managed and I think GTB is one that is very well managed also. I think we have similarities in that instance instead of differences," he said.
Also speaking at the occasion, Managing Director, Inland Bank Plc, Alhaji Zannah Lamba, said the two banks have agreed to create a first class bank with a nationwide branch network. He added that under the agreement, GTB's name and brand will be retained.
He, however, maintained that all Inland Bank's assets and liabilities including its massive goodwill would be transferred to GTB.
"Shares of GTB will be issued to Inland Bank shareholders in a number and at a ratio to be agreed upon at the conclusion of the due diligence and valuation exercise thereby giving Inland Bank shareholders an equal opportunity of investing in global bank," he said.
And in a statement made available to THISDAY in Lagos, GTB stated that: "As the resultant, surviving corporate entity out of this union, GTB's strong financial base, solid liquidity position and reputation for excellent customer service remains unblemished. Details of the MOU between both banks show that the 14 year old Guaranty Trust Bank will acquire the older bank, setting the stage for one of the most desirable franchises in the nation's financial services industry."
Following the take over of Inland Bank, GTB's net assets (capital) are expected to climb up to the N40 billion mark by the end of the year. GTB's capital base currently stands at N34 billion, while that of Inland Bank is about N3.8 billion.
The development, according to the statement, is expected to improve GTB's nationwide branch network to 94 as it absorbs all the 44 branches of Inland Bank, which got listed on the NSE on June 16, 1993, five years after it was licensed and incorporated as a commercial bank in 1988.
|
