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Fresh concerns as GTCO loses N2.57 billion to fraud in 2022, profit dips


The vulnerability of Guaranty Trust Holding Company PLC (GTCO) to scams heightened in the year 2022, as the rate of fraud went up by 84.54 per cent to 27,725 cases from 15,024 in 2021, according to data obtained from the company’s audited 2022 financial statement, BusinessLive writes.

Guaranty Trust Bank Limited, the banking subsidiary of the GTCO is the flagship brand of the company which was consummated in July 2021.

While Segun Agbaje leads GTCO as the Group Chief Executive Officer, Mariam Olusanya holds sway as the managing director of Guaranty Trust Bank Limited.

Checks by BusinessLive reveals that the amount involved in the bank’s 2022 fraud cases was up by 429.85 per cent to ₦ 6.42 billion, compared with ₦1.21 billion recorded in the prior year.

The company noted that at the end of last year, it lost ₦2.57 billion to fraudsters, which was 401.91 per cent higher than the ₦511.96 million it lost in 2021.

Another issue that gave stakeholders concern over the group’s performance last year was the volume of complaints it received from customers.

The number of complaints it received rose by almost 49.36 per cent to 1.01 million against 673,773 it had in the previous year.

The amount involved in the complaints was 30.32 per cent lower to ₦2.16 billion, compared to ₦3.10 billion in the corresponding period in 2021.

However, more of the complaints ended on a happy note in 2022, as it resolved 998,737 complaints, which was 48.58 per cent higher than the 672,167 cases it resolved in the prior year.

Then, in monetary terms, the value of complaints resolved was 30.93 per cent lower to ₦2.14 billion, compared to ₦3.10 billion in 2021.

In the meantime, GTCO improved revenue by 20.42 per cent to ₦539.23 billion during the period under review from ₦447. 81 billion in the previous year.

The revenue increase was largely driven by a 17.36 per cent rise in interest income to N295.12 billion (2021: N251.47 billion) and 22.25 per cent growth in fees and commissions to N90.61 billion (2021: N74.12 billion).

Despite that, its post-tax profits fell by 3.24 per cent to 169.17 billion, compared to 174.84 billion in 2021, and its pre-tax profits declined by 3.3 per cent to 214.2 billion, compared to 221.5 billion in 2021.

It blamed ₦35.6bn impairment recognised on Ghanaian sovereign securities for the drop in its profit last year.

The group had to set aside ₦11.99 billion for bad loans, which was 40.50 per cent higher than ₦8.53 billion it reserved for the same purpose in the prior year.

Other operating expenses also ticked up by 35.08 per cent to ₦126.35 billion during the period under review from ₦93.54 billion in 2021, on the back of communications, technologically-related, and administrative expenses as well as general welfare expenses, which rose significantly by 67.18 per cent to ₦30.54 billion and 75.91 per cent to 11.51 billion, respectively, during this period.

The group’s total assets improved by 18.59 per cent to ₦6.45 trillion at the end of 2022, compared to ₦5.44 trillion in the prior year.

Its loan book (net) increased by 4.6 per cent to ₦1.89trillion from ₦1.80trillion at the end of 2021, while deposit was also up by 11.6 per cent to ₦4.61trillion, compared to ₦4.13trillion in the previous year.

The cash-adequacy ratio (CAR) stood at 24.1 per cent, which was well above the 15 per cent benchmark, and the non-performing loans ratio (NPLs) improved to 5.2 per cent from 6.0 per cent in December 2021.

This was slightly above the 5 per cent limit the Central Bank of Nigeria set.

However, its Cost of Risk (COR) increased marginally to 0.6 per cent, compared to 0.5 per cent in December 2021.

The group had a Pre-Tax Return on Equity (ROAE) of 23.6 per cent, a Pre-Tax Return on Assets (ROAA) of 3.6 per cent and a Cost to Income ratio of 48.0 per cent.

Despite the drop in its profit, the group will pay a final dividend of N3.10 for the 2022 financial year.

Commenting on the results, the group chief executive Officer of GTCO, Mr Segun Agbaje, said; “Our ability to successfully navigate the peculiar challenges in the different markets where we operate underscores our strong business fundamentals and unwavering commitment to sound business strategies. Despite the varying challenges and headwinds that weighed on growth in 2022, we were determined to deliver a decent performance and scale effectively to strengthen our competitive edge and drive long-term growth.

“As an organisation, 2022 was quite significant for us being the first year after our corporate restructuring into a financial holding company in August 2021. Today, across our banking, payment, funds management, and pension businesses, we have successfully built a robust ecosystem with immense potential to deepen our addressable market and create more value for all our stakeholders. We will continue to prioritise innovation, service excellence, and execute seamlessly towards achieving our vision of leading financial services in Africa.”

Recall, BusinessLive reported that group chief executive officer that since Miriam Olusanya emerged as the managing director of GTBank Ltd in July 2021 under controversial circumstances, the once-leading bank has continued to go deeper into crises and financial losses, with customers and shareholders losing faith and trust in the lender.

It is of note that the bank which had tirelessly set the pace for other Nigerian financial institutions in terms of service quality, product functionality and excellent customer service has lost its glory since Olusanya took over its helm of affairs.

To customers of the bank, it is now a sour, bitter, frustrating and nose-diving story.

Many depositors of the bank have started dumping their accounts.

The once-superactive digital platforms of the bank are now comatose in some way.

The bank’s internet banking app, ‘GTWorld,’ its unstructured supplementary service data (USSD) banking platform, *737# smart code, are nothing to write home about as customers of the bank have continued to experience difficulties using the services. It’s been frustrating for the customers of the bank.

Some shareholders of the bank who spoke to BusinessLive on the condition of anonymity have however called on the board to sack Olusanya immediately and bring in a more competent hand to save the bank from imminent collapse.

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