Guaranty Trust Banks presentation

to investors and analysts

based on Group results for
the half-year J une 2011
Important Notice
This presentation is based on Guaranty Trust Bank Plc (GTBank, the Bank) s audited results for the half-year period ended
30 J une 2011 consistent with Nigerian GAAP. GTBank may have obtained some information in this presentation from other
sources it believes to be reliable. Although the Bank has taken all reasonable care to ensure that the information herein is
accurate and correct, GTBank makes no representation or warranty, express or implied, as to the accuracy, correctness or
completeness of such information.
Furthermore, GTBank makes no representation or warranty, express or implied, that its future operating, financial or other results
will be consistent with results implied, directly or indirectly, by such information or with GTBanks past operating, financial or other
results. Any information herein is as of the date of this presentation and may change without notice. GTBank undertakes no
obligation to update the information in this presentation. In addition, some of the information in this presentation may be
condensed or incomplete, and this presentation may not contain all material information in respect of GTBank.
This presentation may also contain forward-looking statementsthat relate to, among other things, GTBanks plans, objectives,
goals, strategies, future operations and performance. Such forward-looking statements may be characterised by words such as
estimates, aims, expects, projects, believes, intends, plans, may, will and should and similar expressions which
are not the exclusive means of identifying such statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause GTBanks operating, financial or other results to be materially different
from the operating, financial or other results expressed or implied by such statements. Although GTBank believes the basis for
such forward-looking statements to be fair and reasonable, GTBank makes no representation or warranty, express or implied, as
to the fairness or reasonableness of such forward-looking statements. Furthermore, GTBank makes no representation or
warranty, express or implied, that the operating, financial or other results anticipated by such forward-looking statements will be
achieved. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be
viewed as the most likely or standard scenario. GTBank undertakes no obligation to update the forward-looking statements in
this presentation.
Outline
Financial Highlights J une 2011
Financial Performance & Analyses
Business Strategy and Objectives
H1 J une 2011 - Financial Highlights (Group)
Profit Before Tax
Return on Equity
Dividends
N31.9bn
25.48%
25 kobo/share
Up 24 % compared to a PBT of N25.7 as at J une 2010
Strong ROE driven by focus on core business and efficiency
Continued culture of ample, consistent returns to our shareholders
Net Interest Margin
NPLs & Coverage
Cost-to-Income
8.17%
NPL3.61% / CR104%
53%
Improved and sustainable margins, driven by pricing efficiency
NPLs down from 6.76% as at Dec-10
Improved cost efficiency with a resolve to be below 50% by YE 2011
Financial Performance Highlights
Tayo Aderinokun passes on
Segun Agbaje becomes CEO
USD 500m Eurobond Issue
After a protracted illness, our former MD/CEO passed on to greater glory
After 9 years as deputy CEO, Mr. Agbaje succeeded Mr. Aderinokun as MD/CEO
GTBank issues oversubscribed USD 500m Senior, Unsecured, 5yr, 7.5% fixed notes
Tate Modern
Euromoney Awards
Thisday Awards
GTBank partners with Tate Modern to promote African Art
Euromoney Awards GTBank Best Bank in Nigeria for third year in a row
Our CEO and executive directors were awarded the Young Global Champions Award
Other Events
Profit after tax N27.48bn Up 50.8% vs. J un-10. Includes N2.2bn extra ord. item from sale of Interswitch
Outline
Financial Highlights J une 2011
Financial Performance & Analyses
Business Strategy and Objectives
Business segment overview
Institutional
Banking
Commercial
Banking
Retail
Banking
Public
sector
banking
Focus on multinationals
and large corporates, with
turnover in excess of
N5bn.
Organised in 5 groups:
Energy, Telecoms,
Corporate Finance,
Corporate Bank and
Treasury
Voted best bank in
Nigeria at the Euromoney
awards (2009,2010,2011)
Over 400
Focus on small & medium
companies,with turnover
between N250m and
N5bn
Extensive product range:
tailor-made solutions and
flexibility
In-depth knowledge of
local market
Over 50,000
Focus on retail customers
Rapidly developing
business
181 branches and 541
ATMs
Extensive leverage of
alternative distribution
channels
Over 3 million
customers
Focus on:
Federal government
State governments
Local governments
and clients
Active in all government
segments
Supported by
strong
support
centers
Financial
control /
Legal
Operations
/ HR
Risk
management
Information
technology
Selected
Highlights
Active
Customers
Contribution to
GTBank
25%
56%
72%
20%
28%
18%
43%
11%
6%
12%
4%
4%
DEPOSITS
LOANS
PBT
Subsidiaries and Group Structure
GTBank GTBank
Institutional
Banking
Division
Retail Banking
Division
Commercial
Banking
Division
Public Sector
Banking
Division
Sub-divided
by Industry
Sub-divided
by Geographic
Regions
Sub-divided by Geographic Regions
Human Resources
Systems Control
Group
Risk Management
Group
Financial
Control/Strategy
Group
eBanking
and Services
Card Unit
Legal Unit
Corporate Affairs
Unit
Security Unit
Admin Group
Settlements Group
Technology Group
Transaction
Services Group
Support Functions
Client Facing Functions
Internal Services Operations Corporate Services
GTBank Organisational Structure GTBank Group Structure
GTBank
Sierra Leone
(since Jan 2002)
GTBank
Gambia
(since Mar 2002)
GTBank
Ghana
(since Mar 2006)
GTB UK
London
(since May 2008)
GTBank
Liberia
(since Mar 2009)
GT Homes
Limited
Guaranty
Trust
Assurance Plc
GTB Asset
Management
Limited
GTB
Registrars
Limited
GTB Finance
B.V.
Banking subsidiaries Non-banking subsidiaries
(1)
Note
1. Non-banking subsidiaries are required to be divested by May 2012. GTB Homes will be integrated
into GTBank. Divestments are scheduled to be completed by December 2011
Profitability (Group)
Strong half year PBT of 31.9bn, up 24% compared to
J une 2010.
Strong half year ROAE of 25.48% and ROAA of 4.3%
(annualized)
Earnings per share of 86 kobo
Half year dividend of 25 kobo per share
Growth in Profitability primarily driven by
growth in non-interest income due to increased volume of
transactions in a period characterized by lower lending
rates
Expense control and efficiency for both interest expense
and operating costs
Continued culture of sustained Profitability Returns on Average Assets/ Equity (ROAA/RAOE)
Consistent dividend payments Profits before tax [Nbn]
2.48%
3.60% 3.50%
2.15%
12.70%
19.50%
18.55%
25.48%
Dec 09 J un-10 Dec-10 J un-11
Return on Average Assets (RoAA) Return on Average Equity (RoAE)
8.33
27.96
25.72
48.46
31.90
J un-09
(6 months)
Dec-09 J un-10
(6 months)
Dec-10 J un-11
(6 months)
0.95
1.00
0.75
1.00
0.25
63%
67%
73%
59%
Feb-08 Dec-08 Dec-09 Dec-10 J un-11
(half-year)
Total Dividends (N per share) Payout Ratio
65.61
119.57
61.07
112.26
62.89
24.99
42.98
21.89
41.65
26.73
J un-09
(Half Year)
Dec-09 J un-10
(Half-Year)
Dec-10 J un-11
(Half Year)
Interest Income Non-Interest Income
54.62
93.89
48.64
85.21
43.99
8.44
15.89
8.03
17.92
12.39
2.54
9.81
4.40
9.13
6.50
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Loans and Advances Treasury bill and investment securities Placements and Short Term funds
Profitability drivers strong revenue generation model
Strong growth driven by non-interest income Revenue mix [Nbn]
Interest income [Nbn] Non-interest income [Nbn]
Strong gross earning growth of 10.7% (compared to
H1 2010) despite industry-wide decrease in lending
rates.
Relatively flat growth in Interest income (compared to
H1 2010) despite 5.7% growth in loan book from
December 2010. However, Net Interest Margin was
sustained due to GTBanks low-cost and efficient
funding base.
Non-interest income grew 22% on the back of
increased business activity in H1 (compared to H1:
J une 2010).
90.6
162.55
82.96
153.91
89.61
65.61
119.59
61.07
112.26
62.89
83.26%
78.51%
79.64%
75.9%
69.96%
12.87%
13.29%
13.15%
15.96%
19.71%
3.87%
8.20%
7.21%
8.13%
10.34%
17.35
30.50
17.69
34.47
21.54
4.07
6.04
1.31
4.58
2.78
3.57
6.42
2.89
2.60
2.40
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Fees and Commissions Foreign exchange Income Other Non-Interest Income
24.99
42.96
21.89
41.65
26.73
81%
10%
9%
83%
11%
6%
71%
14%
15%
81%
6%
13%
69%
16%
14%
Profitability drivers low cost base
Increasingly efficient operations Cost-to-Income Ratio
Expense summary Operating expense breakdown
Cost to income ratio of 53.02%, an 6.72%
improvement from December 2010
Managements focus is to bring Cost to Income back
to below 50% by YE 2011
Management continues to focus on developing
innovative ways to optimize operational efficiency
without sacrificing excellence in service delivery
AMCON levy taken monthly and included in operating
expenses. As at J une 2011, AMCON Levy
constituted 4.5% of operating expenses
77.61%
66.26%
56.25%
56.82%
53.0%
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
3.24
1.57
54.80
92.43
36.13
72.09
44.12
16.29
30.49
20.47
38.75
20.60
8.17
9.30
18.19
10.04 2.85
6.01
3.31
6.83
3.75
1.61
18.40
-
-
-
-
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Other operating Expenses Staff Costs Depreciation AMCON Levy
57.2%
27.9%
10.4%
4.5%
60.8%
28.5%
10.7%
55.5%
33.5%
11.0%
61.9%
28.1%
10.0%
59.6%
29.9%
10.4%
27.31
54.9
33.08
63.77
36.01
27.31
54.90
33.08
63.77
36.01
35.95
2.89
8.09
8.02 24.25
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Operating Expenses Loan Loss Expense Diminution on other assets values
J un-09
(Half Year)
Dec-09
J un-10
(Half Year)
Dec-10
J un 11
(Half Year)
Loans
Deposits
Total Assets
1,036
1,067
1,118
1,152
1,405
626 683
721
761
916
577 563 560
593
627
Loans Deposits Total Assets
Balance sheet
Strong, liquid balance sheet Total Assets, Loans and Deposits [Nbn]
Asset base and components [Nbn] Low cost, diverse funding mix [Nbn]
Total asset growth (Dec-10 Jun 11) - 21.89%
Loan growth (Dec-10 Jun 11) - 5.71% (net of AMCON)
Loan growth (Dec-10 Jun 11) - 11.3% (AMCON included)
Deposit growth (Dec-10 Jun 11) - 20.29%
GTBank raised $500m, 5yr, 7.5% eurobond issue partly to
refinance existing $350m, 5yr, 8.5% eurobond maturing in
J anuary 2012 and partly to finance additional dollar
generating business opportunities
Liquidity ratio 59%
Poised to take advantage of quality opportunities that may
arise
563 560
593
627
225
290 250
296
37
86
157
222
136
73
52
106
36
37
29
71
46
47
51
53
22
24
20
29
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Loans and advances Due from other banks Treasury bills Investment securities
Cash and balances with CBN Property and equipment Other assets
683
721
761
916
192
196
211
221
93
100
106
179
98
101
75
90
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Desposits Equity Borrowings Other Liabilities
1,067 1,118
1,152
1,405
1,067 1,118
1,152
1,405
Net Interest Margins
Strong, sustainable margins Strong net interest margin
Low cost of interest bearing liabilities Competitive yields on interest earning assets
9.62%
7.35%
8.64%
8.90%
8.17%
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Strong Net interest margin 8.17%
GTBank maintained its margins despite interest rate
pressure in the high-end market during the first half of 2011.
General rise in rates will see sustainable and robust margins
for strong banks to the end of 2011
GTBank continues to maintain its focus on profitability
through balance sheet efficiency and controlled growth
5.30%
6.20%
3.18%
2.23%
Dec-08 Dec-09 Dec-10 J un-11
12.98%
12.80%
10.41%
10.93%
Dec-08 Dec-09 Dec-10 J un-11
Asset diversification and quality
Improvement in asset quality Non performing loans to total loans
Loan breakdown by industry Loan loss provisions
NPLs improved from 6.76% as at December 2010 to 3.61%
AMCON: As part of the second phase, GTBank took a total
of N46.95bn (phase 1 N6.17bn, phase 2 N40.77) to
AMCON and received total AMCON proceeds of N31.97bn
(N42.77 face value).
Zenon related facilities to AMCON totaled N35.68bn in
exchange for AMCON considerations of N30.13. The
shortfall has been provided for in our J une 30, 2011 results.
3.71%
11.84%
7.09%
6.76%
3.61%
J un-09
(Half Year)
Dec-09 J un-10
(Half Year)
Dec-10 J un 11
(Half Year)
Information and Communication
9%
General Commerce
13%
Manufacturing
17%
Oil and Gas
26%
Finance and Insurance
2% Others
1%
Human Health and Social Work
Activities
1%
Professional, Scientific and
Technical Activities
1%
Government
2%
Education
3%
Capital Market
3%
Construction
4%
Transportation and Storage
4%
Real Estate Activities
5%
General
9%
34.61
39.09
43.48
24.56
Dec-09 J un-10 Dec-10 J un-11
48.9% 92%
101%
104%
Coverage Ratio Loan Loss Prov.
Key Financial Ratios
Key Group Financials (N'000) 30-J un-09 31-Dec-09 30-J un-10 31-Dec-10 30-J un-11
Balance Sheet N'000 N'000 N'000 N'000 N'000
Total Advances and Loans to
Customers 576,972,949 563,488,164 560,484,672 593,473,681 627,337,280
Total Deposits from Customers 626,357,723 683,080,902 720,981,030 761,194,792 915,639,904
Shareholders' Funds 177,091,995 192,245,028 196,402,336 210,825,690 220,697,380
Total Assets 1,036,265,028 1,066,503,718 1,118,414,040 1,152,411,526 1,404,712,672
Total Assets and Contingents 1,360,608,613 1,399,323,978 1,488,352,238 1,577,399,730 1,869,368,237
Profit and Loss Account 6 months 12 months 6 months 12 months 6 months
Interest Income 65,607,209 119,567,654 61,071,790 112,261,166 62,888,312
Non-Interest Income 24,988,290 42,982,764 21,890,849 41,646,861 26,725,252
Profit Before Taxes 8,325,723 27,963,003 25,722,006 48,455,850 31,900,359
Profit After Tax 8,758,330 23,686,843 18,224,590 38,346,623 27,482,858*
Performance Ratios
Return on Average Assets (RoAA) 1.76% 2.25% 3.34% 3.38% 4.30%
Return on Average Equity (RoAE) 9.76% 12.83% 18.76% 18.83% 25.48%
Net Interest Margin 9.62% 7.35% 8.64% 8.90% 8.17%
Cost/Income 77.61% 66.26% 56.25% 56.82% 53.02%
Balance Sheet Ratios
Loans/Deposits 92.12% 82.49% 77.74% 77.97% 68.51%
Liquidity Ratio 42.41% 41.85% 51.20% 49.11% 59.36%
Capital Adequacy Ratio 25.99% 26.06% 25.75% 25.61% 24.73%
Asset Quality Ratios
NPL/Total Loans 3.71% 11.84% 7.09% 6.76% 3.61%
Provisions for Loan Losses/NPL 144.54% 48.86% 91.97% 101.20% 104%
PAT includes an extraordinary item of N2.23bn which represents the net gain on disposal and diminution in value of SMEEIS investments
Outline
Financial Highlights J une 2011
Financial Performance & Analyses
Business Strategy and Objectives
Business Strategy and Objectives
Cost Control
Use of envelope budgeting
system
Monthly performance review
Outsourcing of non-core
functions
Efficient distribution
Invest in reliable technology
Focus on
Growth business
In 2007 we set out to achieve the following by 2012:
No. 1 bank in Nigeria in terms of profit before tax and Return on Equity / Profitability
Maintain Cost to Income stability through unparalleled efficiency
Expand leadership position across West Africa
2012
Goals
Opportunities
Investment Banking
Advisory
Bonds
Project Finance
Increase market share in the
Institutional banking space
Enhance product
and service offering
Cost
Leadership
Institutional
Capitalise on existing
relationships
Oil & Gas, Infrastructure, Telcos
Increase penetration in growing
sectors
Hospitality, Real Estate Construction,
Power
West African Expansion
(Francophone)
Retail Retail Deposit Drive
Efficient, Innovative banking for the Entire Value Chain
Suppliers
GTBank
Client
Distributors Customers
Employees
Thank you