Segun Agbaje
Group Chief Executive Officer, Guaranty Trust Holding Company (GTCO), Segun Agbaje, in this interview with SIMEON EBULU, spoke on the bank’s business chains and other issues around its operations. He also spoke on the upcoming yearly Food Festival organised by the company and why the bank is cutting loan growth.
Guaranty Trust Holding Company Plc (GTCO Plc) is set to continue its long-running showpiece event– The Food and Drink Festival. Can you throw insight to the event, even if it has been running for the fifth edition?
Yes, it has been running, and this happens to be its fifth edition.This headlining event will hold from Saturday, April 30 to Monday, May 2, 2022, at the GTCentre, Plot 1 Water Corporation Drive, Oniru, Lagos.
As to the essence of the event, the GTCO Food and drink festival brings together the biggest chefs and food lovers from across the world in a celebration of all things delicious with family and friends. Over the years, the Food and Drink festival has hosted millions of people and featured enlightening and engaging masterclasses by world-renowned chefs and food business experts. This year, the free-to-attend three-day festival will feature cooking masterclasses of cuisines chosen from all around the world and over 140 free retail stalls showcasing everything from the best of Nigeria’s street food to bite-sized gourmet treats and fresh farm produce from the farmers’ market.The well-fitted play area is designed to add another layer of excitement for children and keep them meaningfully engaged.
Does Africa’s history and rich cultural heritage reflect in the cuisines meant for display at the festival?
Of course, they reflect. The primary objective of the GTCO Food and Drink Festival is to showcase our diversity and industry as a people while delivering a sumptuous culinary experience to food enthusiasts across the continent. As our contribution to the development of local SMEs, we want to see our retail customers who also own small businesses thrive by giving them more opportunities to connect with consumers from around the world.
What is the essence of the Food Festival?
At GTCO Plc, we are committed to offering our customers and communities great experiences with every interaction and will continue to promote viable enterprises, particularly in the food and fashion industries, given the massive capabilities and countless multiplier effects in these critical industry segments.
In fact, the Food Festival is one aspect of the bank’s “Proudly African” franchise concept and our bank renowned for its innovative approach to customer service and stakeholder engagement which has endeared it to millions of people across Africa and beyond. Over the years, many customers have benefited from our bank’s unique loan products, including the Food Industry Credit and Fashion Industry Credit designed for businesses in the food and fashion industry.
The 2022 GTCO Food and Drink Festival promises to be an experience of a lifetime. If you have been keen to try all the local street food and would like to go on exhilarating culture-filled culinary adventures, this is your chance!
Guaranty Trust Bank intends to return on loans growth path in 2022 financial year after a significant slowdown in 2021. What can you say is the motivation behind the move?
We intend expanding our loan book by about N180 billion or 10 per cent growth rate in the current financial year.
Why were more loans not disbursed last year?
We were constrained from giving more loans last year by two main reasons – macro-economic headwinds and regulatory restrictions. In fact, we could have increased the bank’s income from more loans to compensate for the general decline in interest margins in the industry during the period if not for these challenges. Be that as it may, we expect that the environment would improve in the current year while re-organisations in the bank would enable us turnout response strategies against whatever headwinds may bring against the industry during the year. We couldn’t grow the loan book more. If you grow the loan book, gentlemen, we all live in this country and things are tough. Businesses are going through tough times.
Individuals are going through tough times. If you grow your loan book aggressively, you are going to pick up non-performing loans in the future. It is a time to be careful about loan growth.
If not you will cough up the money into the future. Therefore, we maintained our conservative stands. Of course we know we can make more interest income.
We just book the loans, make interest income, but we may have to cough it up next year.
So, yes, we can grow the interest income, but we need to be careful as the macro environment is improving we will ramp up the loan book.
The bank’s loans impairment charges literarily crashed in the 2021 financial year by 56 per cent to N8.5 billion from N19.6 billion in 2020.
Could you speak more on the regulatory restrictions you attributed to the slowdown in loan disbursement in 2021?
As to that, over 60 per cent of the bank’s cash were tied down in Cash Reserve Requirement (CRR) during the 2021 financial year. It was a situation which denied us the huge resources for trading and further income.
CRR is not unusual. Right now, Ghana just went to 12 per cent. It is the quantum limit. I think our quantum is too high and we should bring it down.
The thing about CRR, if you release it to us we don’t even have to put it in Treasury Bills. We can actually put in loans to customers, to grow the economy. We also earn income rather than the zero earnings in CRR; we can put it in retail loans even if we lend at 10 per cent, which means our profitability will go up.
My belief is that, ultimately, at some point we are going to have to reduce the level of CRR. The CRR is a monetary policy tool that is available to Central Bank (CBN) and you are allowed to use it to control the liquidity in the system. The only thing you will find that the banks might complain about or reason about is the level of the CRR.
! Extract From The Nation
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