Guaranty Trust Bank plc

Transcription

1 plc Financial Results - Dec 2008 (10 months) 1

2 Important Notice This presentation is based on the financial results of the Bank s audited results for the period ended December 2008 consistent with Nigerian GAAP only. Plc ( GTBank, the Bank ) has obtained some information in this presentation from sources it believes to be reliable. Although GTBank has taken all reasonable care to ensure that the information herein is accurate 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 GTBank s past operating, financial or other results. Any information herein is as of the date of this presentation 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, this presentation may not contain all material information in respect of GTBank. Except where indicated, the exchange rate adopted throughout the presentation is US$1 to N139.5 (official exchange rate December 31, 2008). Unless stated otherwise, all figures ratios have NOT been annualized are reported on a 10month basis. This presentation also contains forward-looking statements that relate to, among other things, GTBank s plans, objectives, goals, strategies, future operations performance. Such forward-looking statements may be characterised by words such as estimates, expects, projects, believes, intends, plans, may, will should similar expressions but are not the exclusive means of identifying such statements. Such forward-looking statements involve known unknown risks, uncertainties other important factors that could cause GTBank s 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 reasonable, GTBank makes no representation or warranty, express or implied, as to the fairness or reasonableness of such forwardlooking 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 should not be viewed as the most likely or stard scenario. GTBank undertakes no obligation to update the forward-looking statements in this presentation. 2

3 Outline GTBank s Financial Highlights GTBank Overview (DEC 2008) Operating Environment Business Strategy Objectives 3

4 GTBank s Financial Highlights 4

5 GTBank s Financial Highlights (YE Dec 2008) DEC 2008 (10 months) PBT - $247m Assets* - $9.5bn Deposits - $3.2bn Loans - $2.99bn NPL - 1.7% Shareholders Funds - $1.3bn Robust & Sustainable Growth (10 months) PBT % Deposits % Assets* % Loans % NPL one of Industry s lowest Shareholders Funds % Continuously Improving **RoAA of 5.0% & **RoAE of 24.3%, up by 40% 18% (respectively) from Feb 2008 Over 1.35m retail customers as of Dec 08 up by 21% from 1.07m in Feb 08 Cost/Income ratio of 50.69%, improved by 5.2% from Feb 2008 Most Customer Focused Friendly Bank [retail] in 2008 by KPMG Vanguard; Best Bank in Corporate Governance in 2008 by Vanguard GTBank Financial Highlights Growing International, Local presence Global Medium Term Note Program Continued Increase in local branch network alternate delivery channels Opened new bank subsidiary commenced operations in London in May 2008 Received provisional license to operate in Liberia Completed Anglophone Phase of Strategic West African expansion Setup $2bn GMTN program in June 08; Access to international capital markets with greater flexibility; Program allows multi-currency issues if when required; Aim is to bolster bank s FCY balance sheet meet client s dem * Comprised of Total Assets Contingents ** Using annualized estimates All dollar conversions are computed at N $1 5

6 Income Statement Profit Loss Accounts 10 months ended 31 December 2008 Group Group Bank Bank 31 Dec Feb Dec Feb YOY YOY 10 months 12 months 10 months 12 months Growth* Growth* $'m $'m $'m $'m Group Bank GROSS EARNINGS % 47% INTEREST AND DISCOUNT INCOME % 51% Lease finance income Interest expense (160.31) (139.18) (152.87) (136.15) INTEREST MARGIN % 60% Loan loss expense (net) (28.98) (28.20) (28.23) (27.56) Other income GTBank Financial Highlights Operating expenses (304.93) (220.63) (253.93) (196.61) PROFIT BEFORE TAXATION % 52% Taxation (49.19) (44.44) (45.76) (40.92) PROFIT AFTER TAXATION % 57% * - Annualized estimates All dollar conversions are computed at N $1 6

7 Balance Sheet Balance Sheets As at 31 December 2008 Group Group Bank Bank 31 Dec Feb Dec Feb YOY YOY 10 months 12 months 10 months 12 months Growth* Growth* $'m $'m $'m $'m Group Bank ASSETS Cash short-term funds 2, , % 143% Short term investments 1,018 1, ,252-21% -27% Loans advances 3,002 2,066 2,985 2,090 45% 43% Long term investments % 80% Fixed assets % 14% Other assets % -47% TOTAL ASSETS 6,901 5,274 6,608 5,147 31% 28% GTBank Financial Highlights LIABILITIES Deposits other accounts 3,385 2,602 3,203 2,559 30% 25% Borrowings % 12% Other liabilities 1,760 1,099 1,667 1,031 60% 62% Equity 1,305 1,171 1,287 1,155 11% 11% 6,901 5,274 6,608 5,147 31% 28% Contingents 2,971 2,334 2,894 2,312 27% 25% Balance Sheet Size 9,872 7,608 9,502 7,459 30% 27% * - Growth in 10 months (10 month Dec 08 vs. 12 month Feb 08) All dollar conversions are computed at N $1 7

8 Financial Ratios GTBank Financial Highlights Key Financials ($ 'm) 28-Feb Feb Feb Feb Dec-08 CAGR Balance Sheet Total Advances Loans to Customers , , % Total Deposits from Customers , , , , % Shareholders' Funds , , % Total Assets 1, , , , , % Total Assets Contingents 1, , , , , % Profit Loss Account Interest Income % Non-Interest Income % Profit Before Taxes % Profit After Taxes % Performance Ratios Return on Average Assets (RoAA) 3.41% 3.48% 3.32% 3.59% *5.04% Return on Average Equity (RoAE) 16.15% 23.63% 27.88% 20.62% *24.28% Net Interest Margin 6.44% 6.16% 5.40% 6.79% 7.68% Cost/Income 55.16% 52.01% 54.01% 53.48% 50.69% Balance Sheet Ratios Loans to Customers/ Customer's Deposits 63.70% 39.20% 33.40% 70.60% 81.70% Liquidity Ratio 63.33% 69.22% 69.99% 51.86% 42.00% Capital Adequacy Ratio 28.95% 22.41% 16.64% 27.55% 22.11% Asset Quality Ratios NPL/Total Loans 2.11% 3.37% 2.00% 1.19% 1.70% Provisions for Loan Losses/NPL % % % % % * Based on annualized estimates 8

9 Milestones Key Events GTBank moves year end to December In line with recommendations issued in May 2008 by the Central Bank of Nigeria (CBN), GTBank moved its year end from February 28 to December 31. GTBank opens UK subsidiary. GTBank opens UK, a fully operational retail bank located at 62 Margaret Street, London. Setup $2bn Global Medium Term Note Program (GMTN) Launched Asset Management Subsidiary- April 08 Ratings Awards Ratings (2009) Agusto & Co. Aaa Fitch AA- Stard & Poors BB- Awards Most Customer Focused Bank (retail) KPMG nd Most Customer Focused Bank (corporate) KPMG 2009 Best Bank in Nigeria - JP MorganChase, Oct Report Bank of the Year, Best Bank in Corporate Governance, Most Customer Friendly Bank Vanguard Awards Deal of the Year for Nigeria 08 Banker Magazine Awards GTBank Financial Highlights Growing Presence International GTBank completes Anglo West Africa Expansion Nigeria With the acquisition of a provisional operating license in 2008 the launch of GTBank Liberia in 2009, GTBank completed the Anglophone phase of it s planned expansion into West Africa 142 Branches 398 strategically located ATMs 1.34million retail customers New Products Nigeria s first fully automated mobile bank branch Nigeria s first Drive-Through ATMs Fully automated E- Branches Initiated development of Naira Denominated Mastercards Initiated the development of Prepaid Master & Visa Cards Developed new Student dedicated accounts 9

10 GTBank Overview (DEC 2008) 10

11 Robust Profitability Stable Stable Consistent Consistent Growth Growth RoAE RoAE RoAA RoAA Stability Consistency Stable consistent Return on Average Equity post capital raising in Stable Consistent Return on Average Asset Stable Consistent Dividend Payout Stable Consistent Growth in Earnings with 53% CAGR over past 5 financial years 27.88% 23.63% 20.62% 16.15% 3.41% 3.48% 3.32% 3.59% 5.04% 24.28% 28-Feb Feb Feb Feb Dec-08 Return on Average Assets (RoAA) Return on Average Equity (RoAE) Source: Company data, as of 31 December 2008 (10 months) Dividends Dividends Earnings Earnings [after [after tax] tax] $m $m GTBank Overview (Dec 09) 54% 59% 67% 73% 63% Feb 2005 Feb 2006 Feb 2007 Feb 2008 *Dec 2008 Total Dividend Per Share EPS ## Dividend Payout ratio CAGR 54.3% Feb Feb Feb Feb Dec 2008 Profit After Taxes ($ 'm) * - Proposed Final Dividend for Dec No interim was declared due to new YE Source: Company data, as of 31 December 2008 (10 months) Source: Company data, as of 31 December 2008 (10 months) 11

12 Business Overview Selected highlights Active customers Contribution to GTBank Institutional banking Focus on multinationals large corporates, with turnover in excess of US$40 m Organised in 5 groups: Energy, Telecoms, Corporates, Corporate Finance Treasury Voted Best Bank in Corporate Governance by Vanguard in 2008 About % 27.2% Commercial banking Focus on small & medium companies, with turnover between US$2 m US$40 m Extensive product range: tailor-made solutions flexibility In-depth knowledge of local market Over 50, % 17.9% 67.8% GTBank Overview (Dec 09) Public sector banking Retail banking Supported by strong support centres Focus on: Federal government State governments Local governments clients Focus on retail customers Rapidly developing business 142 branches 398 ATMs Extensive leverage of alternative distribution channels Finance Operations/ HR Active in all government segments Over 1.34m retail customers 28.4% 9.9% 14.8% Risk management 36.2% Information technology 16.8% 5.8% 9.6% Loans Deposits PBT 12

13 Regional Presence Diversification GTBank (Sierra Leone) GTBank Group Guaranty Trust Assurance plc Commenced Operations Jan % Ownership 4 Branches P&L Positive Total Number of Banks: 13 GTBank (Gambia) Commenced Operations Mar % Ownership 8 Branches P&L Positive Total Number of Banks: 11 Commenced Operations - Feb 1991 Listed on the NSE & LSE Over 300,000 Shareholders 6 overseas subsidiaries 5 Bank Subsidiaries 5 non-bank Subsidiaries GTBank Nigeria Commenced Operations -May % Ownership Total Number of Insurance Coys US$13.5m profit before taxes (2008) Strong National Coverage through GTBank s regional branch network GTB Asset Management Limited Commenced Operations April % Ownership AM products services to HNIs Institutions GTBank Overview (Dec 09) GTBank (Ghana) Commenced Operations Mar % Ownership 10 Branches P&L Positive Total Number of Banks: 26 GTB UK (London) Commenced Operations - May 2008 To facilitate trade retail between the UK West African countries GTBank (Liberia) Commenced Operations Mar % Ownership Total Number of Banks: 8 (Others) International Mauritania Senegal Benin Republic Niger Mali Guinea Côte d'ivoire Regional Expansion into West Africa (WA) Completed expansion plans into Anglophone West Africa Expansion into Francophone West Africa underway Positioning for growth reforms Single Currency Burkina Fasso Integration of WA economies Promotion of WA regional trade, gas pipeline etc. Togo Guinea Bissau Strategic Expansion Non Bank Diversification in profitable business segments with strong medium to long term prospects Strengthen Competitive advantage by offering existing clients products to cater to their financial needs. Increase profitability market share Focus on customer satisfaction retention Increase operational synergies within financial services offered to clients GT Homes Limited Commenced Operations - Jan % Ownership Financing of property development mortgages GTB Registrars Limited Commenced Operations - Sep % Ownership Captive Registrar Services GTB Finance BV Commenced Operations - Dec % Ownership SPV for debut of the $350mm Eurobond issue in January

14 Revenue Composition Strong Strong Revenue-Growth Revenue-Growth model model Revenue Revenue growth growth $m $m (Gross (Gross Earnings) Earnings) Strong Revenue Growth 45.4% CAGR for Interest Income Mix 42.1% CAGR for Non- Interest Income Mix Total Revenue 5 year CAGR of 44.3% CAGR 44.3% Growth generated by increased lending opportunities in the real sector, resulting in greater opportunities for fees commissions Increased transactions volumes to generate increased income from transaction fees, charges, commissions foreign exchange earnings 28-Feb Feb Feb Feb Dec 2008 Interest Income Non-Interest Income Source: Company data, as of 31 December 2008 (10 months) Interest Interest Income Income Mix Mix $m $m Non Non Interest Interest Income Income Mix Mix $m $m GTBank Overview (Dec 09) % 29% 2% CAGR 45.4% % 26% 10% 3% % 3% 45% 64% 86% 31% 4% 10% Feb-05 Feb-06 Feb-07 Feb-08 Dec-08 Dealing Other Securities Placements Short Term funds Loans Advances 366 5% % 43% 39% 40% 45% CAGR 42.1% 12% % 36% 51% Feb-05 Feb-06 Feb-07 Feb-08 Dec-08 Commissions Fees charges Other Incomes % 38% 47% % 38% 44% Source: Company data, as of 31 December 2008 (10 months) Note 1. Other fees include Foreign Exchange earnings other fees Source: Company data, as of 31 December 2008 (10 months) 14

15 Efficiency Productivity Improvements Efficient Efficient Conservative Conservative Cost Cost Profile Profile Conservative cost profile Cost to income ratio of 50.69% Below management s maximum of 60% Stable Cost profile Maintained low infrastructure related costs such as power etc through innovative operational policies. Personnel costs in line with industry GTBank remains one of the most efficient in Nigerian banking industry Cost/Income Cost/Income ratio ratio 54.01% 53.48% 50.69% 28-Feb Feb Dec 2008 Cost to Income Source: Company data, as of 31 December 2008 (10 months) Branches Branches Employees Employees Stable Stable Operating Operating Cost Cost profile profile GTBank Overview (Dec 09) Feb Feb Dec-08 Staff Branches ` % 58% 60% 13% 10% 12% 30% 28% 29% Feb-07 Feb-08 Dec-08 Staff Expenses Depreciation Operating Expenses Source: Company data, as of 31 December 2008 (10 months) Source: Company data, as of 31 December 2008 (10 months) 15

16 Strong Balance Sheet Growth Comments Comments Strong asset deposit growth of 58.9% 49.6% respectively (CAGR Feb 2005 Dec 2008) Asset, Asset, Loan Loan Deposit Deposit Growth Growth $bn $bn 9.50 Asset growth driven by government reforms recent economic growth in the Nigerian economy 7.46 Diverse Funding mix with priority on increasing deposits through steady growth optimization of branches delivery channels Increasingly utilizing funds to high margin top-end quality loan activities Funding base diversified further through issue of US$ 350m Eurobond US$ 824m GDRs Feb-05 Feb-06 Feb-07 Feb-08 Dec-08 Total Loans Total Deposits Total Assets & Contingents Source: Company data, as of 31 December 2008 (10 months) Asset Asset Base Base Components Components Funding Funding Mix Mix GTBank Overview (Dec 09) 14% 11% 9% 15% 18% 4% 4% 2% 2% 3% 27% 24% 39% 45% 41% 34% 33% 17% 14% 24% 28% 24% 26% 27% 14% Feb-05 Feb-06 Feb-07 Feb-08 Dec-08 Cash short-term funds Short term investments Loans advances Long term investments Other assets 13 % 10 % 22% 22% 19 % 14 % 17% 17% 3% 12 % 20% 25% 4% 8% 7% 70% 57% 61% 50% 48% Feb-05 Feb-06 Feb-07 Feb-08 Dec-08 Deposits other accounts Borrowings Other Liabilities Equity Source: Company data, as of 31 December 2008 (10 months) Source: Company data, as of 31 December 2008 (10 months) 16

17 Strong Net Interest Margins Comments Comments Yield Yield on on Interest Interest Earning Earning Assets Assets Consistently Strong NIM Yield Cost of liabilities were generally higher in the industry due to initial anticipation of common YE among banks. This fuelled fierce competition for deposits which drove rates higher. 9.32% 9.88% 12.98% The CBN has released a recent directive capping loan interest rates at 22% deposit rates at 15% to avoid similar spikes in the renewed drive to a common year end. Consistently low cost of liabilities Feb-07 Feb-08 Dec-08 Growth in dem deposits through extensive branch network increase in alternate delivery channels. Average Yeild on Assets Source: Company data, as of 31 December 2008 Cost Cost of of Interest Interest Bearing Bearing Liabilities Liabilities Net Net Interest Interest Margin Margin GTBank Overview (Dec 09) 5.30% 4.09% 3.70% Feb-07 Feb-08 Dec-08 Average Cost of Liabilities 7.68% 6.79% 5.40% 28-Feb Feb Dec-08 Net Interest Margin Source: Company data, as of 31 December 2008 (10 months) Source: Company data, as of 31 December 2008 (10 months) 17

18 Capital Adequacy Liquidity Comments Comments Capital Capital Adequacy Adequacy Ratio Ratio Capital Adequacy well above Basel requirement of 10% Strong liquidity ratio above regulatory minimum of 25% Loan to Deposit ratio shows growth in lending post January 2007 Eurobond offering 28.95% 22.41% 27.55% 22.11% 16.64% 28-Feb Feb Feb Feb Dec-08 Capital Adequacy Ratio Source: Company data, as of 31 December 2008 Loan Loan to to Deposit Deposit Ratio Ratio Liquidity Liquidity Ratio Ratio GTBank Overview (Dec 09) 81.70% 70.60% 63.70% 39.20% 33.40% 28-Feb Feb Feb Feb Dec-08 Loans to Customers/ Customer's Deposits 69.22% 69.99% 63.33% 51.86% 42.00% 28-Feb Feb Feb Feb Dec-08 Liquidity Ratio Source: Company data, as of 31 December 2008 Source: Company data, as of 31 December

19 Loan Portfolio Diversification Quality Best Best in in Class Class in in Nigerian Nigerian banking banking industry industry Industry Industry Concentration Concentration GTBank is taking advantage of quality lending opportunities in the institutional commercial banking space Agriculture, 0.39% Mining, 7.39% Portfolio well spread across sectors with concentration is stable established institutions Consistently improving asset quality on the back of sound risk management practices NPL ratio of 1.7% - within Management s target of < 5% High coverage ratio - well above 100% Foreign exchange risk averted through proper matching of dollar funding (e.g. Eurobond) to dollar generating clients only. This applies across all forms of foreign exchange transactions. General Commerce, 28.72% Transportation & Communication, 21.89% NPL NPL Coverage Coverage Ratios Ratios Finance Insurance, 8.92% Source: Company data, as of 31 December 2008 Manufacturing, 21.22% Construction/Real Estate, 11.21% Public Utilities, 0.25% GTBank Overview (Dec 09) 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 28-Feb Feb Dec-08 NPL/Total Loans Provisions for Loan Losses/NPL % % % % % % 80.00% 60.00% 40.00% 20.00% 0.00% Source: Company data, as of 31 December

20 GTBank s Profile Pre-eminent Institutional & Commercial Banking Franchise Institutional Institutional Banking Banking Traditionally strong, GTBank continues to cultivate exp key relationships Relationships with 90% of Nigeria s corporates Significant boost to the segment following the increase in capital base Able to increase lending to large borrowers (i.e. larger single obligor limit) Wide product offering which includes: import finance facilities; export credit lines; US denominated credits; equipment finance etc Commercial Commercial Banking Banking Covers the middle market Segment organised by geography industry sectors to achieve proximity to clients to better address their needs Broad lending, product offering customized solutions Overdrafts, term loans, commercial paper, bankers acceptances Most loans are secured by real estate Focus on stable, high growth industries oil gas; telecoms; real estate; construction manufacturing Syndications Syndications GTBank Overview (Dec 09) Key Clients Margins on Corporate Loans: 10% average NIM 0.5% facility fee; Also under the corporate banking umbrella Treasury Group consisting of ALM, Funds Management Trading (5 desks) Units Corporate Finance providing investment banking advice loan syndications to existing Clients. US$1,278 Million Syndicated Notes Issuance Facility Danote Group of Companies Lead Arranger 20

21 GTBank s Profile (Cont d) Strategic Distribution Expansion to Capture Increasing Opportunities North West # Branches - 10 # ATMs - 37 Effectively Effectively Employing Employing Alternative Alternative Distribution Distribution South West # Branches - 25 # ATMs - 63 Lagos North East # Branches - 14 # ATMs - 29 Established country s 1st fully integrated Interactive Call Centre Other distribution channels such as internet banking, telephone banking, mobile banking, etc deployed nationwide # Branches - 50 # ATMs Total Abuja - NC # Branches - 15 # ATMs - 46 South East Bank on wheels: mobile banking unit to service remote communities # Branches # Branches - 28 # ATMs 398 # ATMs - 74 Source: Company data, as of 31 December 2008 GTBank Overview (Dec 09) Numbers of Branches ATMs Feb 03 Feb 04 Feb 05 Feb 06 Feb 07 Feb 08 Dec 09 Branches ATMs Source: Company data, as of 31 December 2008 Retail Retail Banking Banking Opportunity Opportunity Servicing increased dem for retail banking products services by Nigeria s emerging middle class Target market: Traditionally, the upper segment of the economy; mainly employees of institutional banking clients Re-bred to attract a broader segment Increased reach efficiently effectively by employing alternative distribution channels GTBank is focused on exping the liability side while following a prudent approach to lending Focused on customer service support 21

22 GTBank s Profile (Cont d) Exping distribution network channels Strong Strong growing growing local local presence presence Continuing Continuing increase increase in in Branches Branches & ATMs ATMs 398 ATMs located in branches in strategic locations new ATMs deployed since Feb 2008 Plan to increase ATM network to 1,000 by Significant growth recorded in utilisation levels (branches/atms) Q1 Q2 Q3 YE (10 months) 142 branches cash centres strategically located in key urban areas as of Dec 2008 Branches ATM Source: Company data, as of 31 December 2008 Growth Growth in in transactions transactions via via ATMs ATMs GTBank Overview (Dec 09) 11 branches opened since Feb 2008 Several branches in the pipeline, i.e. in construction or awaiting CBN approval Network expected to increase in line with Management projections of 200 branches by 2012 Branches are multifunctional catering predominantly for retail, commercial public sector clients , , Q1 Q2 Q3 Value $'m Volume '000 5,298 6,000 5,000 4,000 3,000 2,000 1,000 0 Source: Company data, as of 31 December

23 GTBank s Profile (Cont d) Leveraging on alternative distribution channels Sustainable Sustainable growth growth profile profile Telephone Banking Clientele 35,359 26,739 27,900 27,243 26,668 26,905 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 with with impact impact on on retail retail clientele clientele base base Telephone banking Available 24/7 to all customers First fully Interactive Voice Response in West Africa Number of active users = 35,359 Plan to use medium to telemarket cross-sell all bank s products GTBank Overview (Dec 09) Internet Banking Clientele 38,186 35,140 31,112 32,116 26,852 27,002 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Retail Clientele (in millions) Internet banking internet payment systems Gaining traction popularity amongst users Available to all customers Number of active users = 32,1116 Bank on Wheels First unit launched in April 2007 Cost efficient way to reach unbanked communities provide ad-hoc banking services Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Source: Company data, as of 31 December

24 GTBank s Profile (Cont d) Growth across all distribution segments Market Market Position Position Growth Growth in in POS POS terminals terminals acquired acquired One of the 5 principal member banks of MasterCard in Nigeria One of the top banks in transactions per ATM (efficiency) Ranked 2nd in Cards Usage on POS terminals ,084 1,106 5th in number of card transactions processed Ranked 4th in number of Point-of-Sale (POS) terminals Source: Interswitch Report Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Source: Company data, as of 31 August 2008 Growth Growth in in Card Card volumes volumes Consistent Consistent growth growth in in ATM ATM & POS POS terminals terminals GTBank Overview (Dec 09) 1,463,213 1,308,619 1,194,126 1,032,202 1,082,043 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 1,084 1, Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Source: Company data, as of 31 August 2008 ATMs POS Terminals Source: Company data, as of 31 August

25 Operating Environment 25

26 Macro Economic Overview (2008) Financial Financial Markets Markets In 2008, the Global financial markets suffered a severe downturn. The Nigerian financial markets also experienced a similar correction in what, till March 2008, could have been seen as a bull market. Over the course of the year, the Nigerian Stock Exchange Index declined by 45.77% Exchange Exchange Rate Rate In 2008, in a reaction to the drastic drop in oil prices other macroeconomic developments, the Central Bank of Nigeria devalued the Naira from N117/$1 to N139.5/$1 as at December 31, Dec Dec YTD Chg. Nigerian Stock Index 57, , % Dow Jones Industrial Avg 13, , % FTSE 100 Index 6, , % Nasdaq Composite Index 2, , % Nikkei 225 Index 15, , % S&P 500 Index 1, % Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Operating Environment Crude Crude Oil Oil prices prices 2008 saw a 53.5% decrease in oil prices from Dec 31, 2007 (95.98) to Dec 31, 2008 ($44.60). Inflation increased 76% over the year. Inflation is likely to be sustained due to Naira devaluation in an import dependent economy $ $ $ $ $80.00 $60.00 $40.00 $20.00 Government Government To reduce a dependence on oil as a major source of GDP, the Nigerian government began an initiative to introduce programs to boost productivity in the agriculture sector e.g. the N200 Special Fund for Large Agriculture Credit Scheme. The measures are expected to reduce the impact of crude oil price fluctuation inflation. It is expected that the CBN will be able to curtail further devaluation current exchange rates if oil prices stay near or above $45 (Government s 2009 budgetary benchmark) The SEC the CBN released new regulations guidelines to stabilize the market. $0.00 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 26

27 Regulatory Environment Central Central Bank Bank of of Nigeria Nigeria May 2008 CBN issues circular to Banks to adopt common Year end. August 2008 In reaction to interest rate spikes CBN cancels move to common year end Rationale Rationale To further strengthen the banking sector to enable better regulation of the banking industry Sept Introduced discount window facility To help banks manage their liquidity curtain margin loan crisis Directive to Banks giving them the option to restructure margin loans until 2009 To ensure a controlled workout of margin loans to prevent undue panic market over-reaction Sept CBN reduces MPR from 10.25% to 9.75%, CRR from 4% to 2% liquidity ratio from 40% to 30%. April CBN reduces MPR from 9.75% to 8%, CRR from 2% to 1%, liquidity ratio from 30% to 25% To ensure continued market liquidity which would in turn stimulate economic growth Dec Downward review of net Open Position Limits from 20% - 10% of shareholders funds, Jan 2009 from 10% to 5%, April 2009 from 5% to 1% To discourage currency speculation by banks Jan Fx purchases by banks to be used for eligible transactions cannot be sold to other banks To discourage official parallel market arbitrage opportunities Jan Introduction of 5 day utilization for all fx purchases (not limited to RDAS) To reduce artificial dem distortions in the market Operating Environment Jan Repurchase by CBN of Fx purchases (Other than RDAS) after the utilization period at 1% maximum below its selling rate at the immediate previous RDAS Jan Fx receipts by oil firms, Oil services companies government agencies can be sold only to the CBN Feb Bid/Offer margin on all Fx transactions by Authorized Dealers restricted to maximum of 1% & 2% around CBN rates for interbank BDC respectively Feb Re-classification of BDC operators into classes A&B Feb 2009 CBN commits to managing exchange rates between a b of +/-3% 2009 MPC meets to reinstate move to uniform year-end Source: CBN IFRS reporting for all Banks starting December 2009 To reduce fluctuation stabilise exchange rates at ± 3% To maintain control of large currency transactions better regulate currency rates To reduce fluctuation stabilize exchange rates at ± 3% To enable easier more efficient currency control the CBN created two tier structure for BDCs To manage expectations, create stability encourage trade To further strengthen the banking sector, increase transparency enable better regulation of the industry 27

28 Business Strategy Objectives 28

29 Business Strategy Objectives (Medium to Long Term) 2012 Goals No. 1 bank in Nigeria in terms of profit before tax Return on Equity / Profitability Maintain Cost to Income stability by managing costs Exp leadership position across West Africa Focus on Growth business Enhance product service offering Cost Leadership Institutional Opportunities Cost Control Business Strategy Objectives Capitalise on existing relationships Oil & Gas, Infrastructure, Telco Increase penetration in growing sectors Hospitality, Real Estate Construction, Power West Africa selective expansion investments Suppliers Insurance Mortgage Banking Investment Banking Advisory Capital Markets Project Finance Asset Management Efficient, Innovative banking for the Entire Value Chain GTBank s Client Employees Distributors Monthly budgets Outsourcing of non-core functions Staff incentives for cost savings Efficient distribution Invest in reliable technology Customers 29

30 Thank You 30