The managing director, Guaranty Trust Bank, Mr. Segun Agbaje has said the financial powerhouse will grow its loan book by 10 per cent this year up from the nine per cent reduction recorded by the bank in 2017.
Speaking at a parley with media executives yesterday, Agbaje said the bank hopes to improve its loan to deposit and borrowings from 58.9 per cent recorded in 2017 to 70 per cent by the end of 2018 as it looks forward to a 12 per cent growth in deposits.
He said the bank looks forward to posting a growth in its profit before tax from N200 billion it made in 2017 to N205 billion. He however, said 2018 will be more challenging for banks as yields on treasury bills drop. Banks have staked more on treasury bills in recent times as analysts say close to 30 percent of banks profit cone from trading in government securities
Treasury Bill yields which opened last year at around 18 per cent had risen to 23 per cent during the year before, closing at 18.50 per cent. Agbaje noted that the drop in TBill yields will challenge banks to focus more on their traditional roles of intermediation as more funds will go to lending rather than trading government securities.
“The banks will work harder this year as Treasury Bills yields drop. It will be a bit challenging but will not necessarily lead to a drop in profit,” he explained. He also said bank will be cautious of growing its loan book in 2018 stating that Nigeria needs more than a one per cent growth in Gross Domestic Product (GDP) for it to fully come out of recession.
Agbaje noted that a one per cent growth for a country that was doing up to six per cent prior to the recession is still a slow recovery. According to him, the growth witnessed so far is yet to reflect in the lives and spendings of its citizens, a situation which he said would tell if the country is fully out of recession.
Agbaje explained that the bank had not grown its loan book aggressively in the last year because it was cautious of increasing its non- performing loan portfolio. Having cut back its loan book by nine per cent last year, Agbaje said GTB plans to grow its loan book by 10 per cent in 2018.