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Tuesday 03 March 2020
BUSINESS DAY
news GTBank reports profit before tax of N231.7bn in 2019
... proposes final dividend of N2.50k HOPE MOSES-ASHIKE
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uaranty Trust Bank plc has released its audited financial results for the year ended December 31, 2019 to the Nigerian and London Stock Exchanges. A review of the results shows positive performance across all financial indices, reaffirming the bank’s position as one of the most profitable and well managed financial institutions in Nigeria. Profit before tax stood at N231.7 billion, representing a growth of 7.5 percent over N215.6 billion recorded in the corresponding year ended December 2018. The bank’s loan book grew by 19.0 percent from N1.262 trillion in December 2018 to N1.502 trillion in December 2019, while customers’ deposits increased by 11.4 percent to N2.533 trillion from N2.274 trillion in December 2018. The bank maintained a well-structured and diversified balance sheet with total assets and shareholders’ funds closing at N3.759 trillion and N687.3 billion respectively. Full Impact Capital Adequacy Ratio (CAR) remained very strong, clos-
ing at 22.5 percent. In terms of assets quality, NPL ratio improved to 6.5 percent in December 2019 from 7.3 percent in December 2018 while Cost of Risk (COR) remained flat at 0.3 percent. Complementing the improvement noted in NPLs, the bank maintained adequate loan loss coverage of 126.6 percent for Lifetime Credit Impaired Loans (NPLs) compared to 105.1 percent recorded in December 2018. “At GTBank, we exist to provide excellent service to our customers and generate the returns that our shareholders expect. Our strong financial performance in 2019 demonstrates that we are delivering on both fronts. We achieved healthy growth across all our major businesses despite varying degrees of uncertainty and volatility, and we are making progress in positioning our business for long-term growth in the face of a rapidly changing competitive landscape,” Segun Agbaje, managing director/CEO, Guaranty Trust Bank plc, said.
LEKOIL investigation committee says purported deal with QIA was fake … to recover $450,000 from Seawave … to review corporate governance OSA VICTOR OBAYAGBONA
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EKOIL, an oil and gas exploration and production firm with focus on Nigeria and West Africa, is set to review its internal corporate governance guidelines following the results of the investigation into the origination and execution of the loan agreement earlier announced by the company on January 2, 2020, with the Qatar Investment Authority (QIA). As the company noted January 13, 2020, following the discovery that the Facility Agreement had not been entered into with the QIA, but instead with
certain individuals falsely purporting to represent the QIA, the Board established an independent committee to investigate the origination and execution of the Facility Agreement and steps that might reasonably be taken to retrieve money paid in association with the transaction. The committee was supported in its review by Kroll Associates UK Limited acting as third-party forensic investigators. Advice was taken from Herbert Smith Freehills LLP, legal counsel engaged at the time of the investigation, on discreet issues arising from Kroll’s work. The committee has reported to the Board the
following results of the investigation: The Facility Agreement was a part of a fraud perpetrated against the company. The Facility Agreement and the sums to be received by LEKOIL pursuant to it are not legally binding. There is no evidence of any complicity of any Lekoil director or employee in the fraud. The CEO led the interaction and negotiations with the individuals falsely purporting to represent the QIA, on behalf of the company, prior to ultimate approval being given by the Board to enter into the Facility Agreement. The company has a legal claim to recover the
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Jack Welch, who led GE to become world’s most valuable company, dies at 84 ISAAC ANYAOGU
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ack Welch, a railroad conductor’s son who became chairman and CEO of General Electric and led it for two decades heralding its biggest growth, from $12 billion to $410 billion, has died at 84. The cause was renal failure, his wife, Suzy Welch, said. She did not say where he died. Combative and blunt, Welch became the chief executive of General Electric in 1981, a few months after Ronald Reagan took office as president. It was a time of outsize gains for many of America’s big, multinational corporations and their leaders, who were helped by lower taxes and pro-business policies. GE led the pack. The company’s revenue jumped nearly fivefold, to $130 billion, during Welch’s tenure, while the value of its shares on the stock market soared from $14 billion to more than $410 billion. With a determination to win by busting up bureaucratic complacency, Welch earned two titles — “manager of the century” and “Neutron Jack” – the latter for slashing tens of thousands of jobs. Under his leadership, GE became the world’s most valuable company, after Microsoft. Its fortunes later turned south. While at the helm, Welch bought and sold scores of
$450,000 paid to Seawave Invest Limited and its principals, in its capacity as introducer of those falsely purporting to represent the QIA. The Board only approved the execution of the Facility Agreement after a third-party global risk consultant engaged to undertake the due diligence investigation on Seawave provided a report, based on public record search, that did not identify any ‘red flags’ on Seawave or its principals. The fraud, while relatively elaborate and sophisticated, should have been capable of being detected by parties engaged Continues on page 38
businesses, expanding the industrial giant into financial services and consulting. GE Capital Bank was founded seven years into his tenure. His acquisitions included RCA – then-owner of NBC – and Kidder Peabody, the brokerage that became entangled in an insider trading scandal. He also streamlined the conglomerate’s bloated bureaucracy by giving managers free rein to make changes they deemed beneficial to the bottom line. Welch’s stardom extended beyond the business world. In a 2000 auction for the rights to his autobiography, Time Warner’s book unit won with a bid of $7.1 million, a record at the time. Jack: Straight from the Gut, written with John A. Byrne, was published the next year and eventually sold more than 10 million copies worldwide. He invented the “vitality curve”, in which managers were ranked into three groups. The top 20 percent “A” group was “filled with passion, committed to making things happen”. The “vital” 70 percent “B” group was essential to the company and encouraged to join the A’s. Then there was the bottom 10 percent “C” group. “The underperformers generally had to go,” Welch said in his 2001 book, Jack: Straight From the Gut.
•Continues online at www.businessday.ng www.businessday.ng
L-R: Ade Adefeko, vice president, Olam; Praveen Paulsamy, head, Olam Dairy, and Usman Abdullahi, chairman, at the MoU signing between Olam Dairy and Kano Dairy Cooperative Union on Pilot Milk Collection and Aggregation in Kano.
IFC partners Coronation Merchant Bank to boost trade finance in Nigeria HOPE MOSES-ASHIKE
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FC, a member of the World Bank Group, has announced a $40 million Trade Finance Guarantee facility to Coronation Merchant Bank under its Global Trade Finance Program. This will enable Coronation Merchant Bank to establish and expand correspondent banking partnerships with several international banks in IFC’s trade finance programme, broadening access to finance in Nigeria. IFC’s Global Trade Finance Program (GTFP) will offer confirming banks full or partial guarantees to cover the trade-related payment obligations of Coronation Merchant Bank. The programme sup-
ports trade with emerging markets worldwide, allowing participants conveniently finance their imports and exports, and promotes the flow of goods and services between developing countries. “The GTFP partnership is a critical milestone for us in our journey to become a leading financial institution in Nigeria. We are delighted to partner with the IFC in providing trade finance solutions to our customers and we assure all our clients of our continued support to enable them achieve their business objectives,” Banjo Adegbohungbe, acting managing director, Coronation Merchant Bank, said on the partnership with IFC.
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Kevin Njiraini, IFC’s director for Southern Africa and Nigeria, said, “We welcome Coronation Merchant Bank to the Global Trade Finance Program, which has been very active in Nigeria in the past. This relationship will help improve the bank’s trade with other countries, and create new economic opportunities in Nigeria.” Njiraini said the partnership attests to the continued growth of the Nigerian financial sector and restates IFC’s commitment to emerging markets around the world. Coronation Merchant Bank was established in 2015 to provide wholesale banking to a long under-served market. The bank offers invest@Businessdayng
ment and corporate banking, private banking/wealth management and, global markets/ treasury services to its clientele. In 2019, Coronation Merchant Bank received awards such as Best Investment Bank in Nigeria by Global Finance, Best Investment Bank in Nigeria by World Finance, Best Investment Bank by Global Banking and Finance Review, and Best Investment Bank by Global Business Outlook. The partnership with Coronation Merchant Bank underscores IFC’s commitment to Nigeria. IFC has invested in several projects in heavy manufacturing, technology and financial services, amongst other key sectors in the country.