Why We Can’t Grow Our Loan Portfolio Further — GTCO

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Group Managing Director (GMD) of Guarantee Trust Holding Company (GTCO), Segun Agbaje, said the bank could not increase its loan portfolio further as micros are not doing well as individuals and businesses go through very difficult times.

Agbaje said so during an interactive session with business editors in Lagos. He said if loan portfolios grew aggressively, the bank would end up recovering non-performing loans in the future.

“Now is the time to pay attention to loan growth. In Nigeria where you are running your business, your strategy has to be agile, you have to have the ability to be very agile and to turn very fast as things change. Our structure is very agile, we can adapt very quickly,” he said.

For SMEs, he noted expressed the bank’s determination to thrive no matter how tough it is. He said the bank will deploy artificial intelligence and look at different and many other things to lend to SMEs. “Most companies are SMEs, you have to focus on the fundamentals of the business”,

Commenting on the fees charged for USSD transactions, Agbaje explained that the N6.98 charged does not go to the bank; but goes directly to the telecommunications companies (TELCOS).

He said: ‘It’s just that we charge it and give it to them. The only thing banks get from USSD transactions is the NIBSS Instant Payment (PIN). Now most transactions are up to N10,000, what the bank gets is N10 on PIN, while the N6.98 charged goes to Telcos.

Agbaje further clarified that the banks never owed Telcos any money. “It was their decision to allow customers to do USSD transactions, if they don’t charge the customers the bank cannot be held responsible. GTBank has a letter to prove, written to all telecom operators, that the bank will not be liable for USSD charges and so if they continue to provide the service free of charge, that is not the bank’s problem.

While he unveiled the company’s plan to change its banking software this year to something more user-friendly and adaptable; he mentioned that he will also post what his payment company is doing quarterly. “We will create transparency in the financial technology (FINTECH) industry that does not exist.”

During the session, the GMD also denounced the rising cost of energy, particularly diesel, saying the bank had reduced its closing time from around 6 p.m. to 4 p.m. a day in a bid to reduce the costs.

He also denounced the increase in the cash reserve ratio (CRR), which he said made things even more difficult for banks. The implication of high CRR for Nigerian banks, he said, is that money that would have earned more interest earnings is sterilized with the Central Bank of Nigeria (CBN). “I’m not saying that the CBN has no right to use CRR as a monetary tool, but rather the ratio is too high,” he said.

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