An Evaluation of the Business and Financial Performance of Guaranty Trust Bank Plc (Gt Bank) from 1st March 2005 to 29th February 2008.

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My research is AN EVALUATION OF THE BUSINESS AND FINANCIAL PERFORMANCE OF GUARANTY TRUST BANK Plc (GT BANK) FROM 1ST MARCH 2005 TO 29TH FEBRUARY 2008. The banking landscape in Nigeria has changed tremendously since the Central Bank of Nigeria (CBN) compelled banks to raise their capital base to a minimum of N25 billion in July 2004. The re-capitalisation and consolidation exercise took effect on the 31st of December 2005.


The banking industry in Nigeria has witnessed a very rough and turbulent ride since its British colonial masters introduced banking to the country. For a very long time in the history of Nigeria, the industry was plagued with bad loans, inadequate capital, liquidity problems, low staff morale, lack of skilled and technical expertise, little or no infrastructure, fraud, distressed and failed banks, no corporate governance culture, lack of sound management and political instability.

The emergence of a democratically elected government on 29th of May 1999 ushered in a great measure of political stability in Nigeria. This enabled the government to embark upon the reform process that changed the Nigerian banking landscape. The Central Bank Governor, Dr. Charles Soludo, announced the 13-point reform process in July 2004.

This led to the re-capitalisation and consolidation of the banking sector. There was renewed interest in Nigeria from the international community as foreign direct investment was brought into a number of banks. This enabled the banks in turn to leverage and take advantage of the world’s major markets and financial centres, as a number of Nigerian banks established subsidiaries in various economies of the world, particularly the United Kingdom.


Before the re-capitalisation and consolidation exercise, the Nigerian banking industry was in total shambles. Only a few of the 89 banks were healthy to carry on the business of banking. However, the re-capitalisation and consolidation exercise brought about the emergence of 25 banks that were meant to be healthy. The effect was to sanitize and bring long-term stability to an already battered industry. In its quest to ensure that these objectives were realised and sustained, the Central Bank of Nigeria asked all banks in the country to adopt the CAMEL (Capital, Assets Quality, Management, Earnings and Liquidity) principle (Omolumo, 2000).

It is on this basis that the researcher has chosen this topic in order to view and analyse the business and financial position and performance of Guaranty Trust Bank Plc, 2 years 9 months after the re-capitalisation and consolidation exercise of the Central Bank of Nigeria came into effect on 31st December 2005 and at a time the bank’s operations are expanding to the United Kingdom, Ghana, Sierra Leone and Gambia. 1.2SHORT HISTORY OF GUARANTY TRUST BANK Plc

Guaranty Trust Bank Plc was incorporated in July 1990 as a private limited liability company wholly owned by Nigerian individuals. The bank received its commercial banking licence in August 1990 and commenced operations in February 1991.

Following the directive by Central Bank of Nigeria (CBN) that all banks should re-capitalise, Guaranty Trust Bank Plc became a publicly quoted company in 2004.

In February 2002, the bank obtained a universal banking licence and was appointed a settlement bank by the Central Bank of Nigeria (CBN) in 2003.

The bank’s capacity to meet its obligations as they fall due has been recognised by several rating agencies. Agusto & Co, one of the foremost credit agencies in Nigeria has reaffirmed the bank’s (Aaa) risk rating every year for the last 4 years. Fitch Global assigned an (AA-) risk rating in recognition of the bank’s strong domestic franchise, good quality assets and sound earnings record. This is the highest rating ever received by any Nigerian or West African based bank....
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