TheCable

Guaranty Trust Bank (GTB) says it is a “strong believer” in small and medium-sized enterprises (SMEs).

Segun Agbaje, managing director of the bank, said this at a business forum in Lagos.

Agbaje, who said an economy cannot grow without the support of SMEs, said a bank needs to have absolute understanding before going into it.

“We are strong believers in SMEs, we believe that you can’t grow an economy without supporting SMEs,” he said.

“But it’s also not an area that you dive into without absolutely understanding it. If not, what you will pick up are non-performing loans.

“So, we are driving it. Last year we were probably zero about loans, but now we are 1.5. What you must also realise is that it will continue to grow, but it will never be a large percentage because of the way our loan book is.

“Our loan book is 72 percent corporate, so if I give a loan of N10 billion to corporate organisations, you can imagine how many SME loans I will need to get to N10 billion.

“So, I think our strategy in the next five years is to get SME loans to eight to 10 percent. It is gradual but we believe that we will get to our target in the next five years in terms of SMEs.”

Agbaje also spoke on the advantage of retail banking, describing it as a blessing for GTB.

“Retail has been a blessing. Five years ago we dived into retail, we had over two million customers, but today we have 10 million,” he said.

“I have to thank the customers for keeping us alive and keeping us strong. The challenges of retail are many.

“One of the challenges is overcrowding of the branches. What we are hoping is that more and more there will be less and less reason for people to come into the banking hall.

“Today, you have internet banking, you have ATMS, the world has gone digital… Efforts are being made to increase the service touch points to give customers more exciting banking experience, including ensuring that in no distant time most banking transactions would be done on phones and through the internet from the comfort of customers offices and homes.

“Over the next three to five years, we should be able to serve a substantial part of your retail base out of bricks and mortars, and even if we are opening branches, we are doing so very cautiously. We don’t believe that the answer is to open too many, because soon most of the banking services will be done on the telephones you are holding, and I am sure many are already doing that. For those who use our 737, it is working very well.”

He also gave a breakdown of the bank’s performances in 2016.

Agbaje said GTB posted gross income of N414.62 billion, showing a growth of 37 percent from N302 billion in 2015, with interest income contributing N262.49 billion of the gross income while its non-interest income grew from 24 percent in 2015 to 37 percent in 2016.

At another level, loans and advances grew strongly in the year at 16 percent to N1.59 trillion, doubling the increase of 7 percent recorded in 2015.

Investment assets also grew by more than 34 percent to stand at over N528 billion in the year. These spurred the increase of 23 percent in asset base, which amounted to a little over N3 trillion at the end of 2016.