GTBank Insider Lending Level Low, Says Afrinvest

• GTBank Insider Lending Level Low, Says Afrinvest

Afrinvest West Africa Limited, a Nigeria-based research and investment advisory firm, has said that Guaranty Trust Bank Plc’s insider-related lending level is low, contrary to its earlier report categorising it as severe.

The 2017 Nigerian Banking Sector Report published by the research firm categorised the severity of insider lending positions in 14 quoted Deposit Money Banks in the country as low, moderate, severe and high.

According to the report, five banks have high level of insider lending; four banks have severe level of insider lending; two banks have moderate level of insider lending, while the remaining three banks out of the 14 banks profiled in the report have low level of inside lending.

A section of the banking sector report was published on Tuesday.

However, Afrinvest on Wednesday categorised GTBank as having low level of insider lending, stating that its earlier categorisation of the bank as having severe level of inside lending was in error.

This means that out of the 14 banks profiled in the banking sector report, only four banks, GTBank, Zenith Bank Plc, United Bank for Africa Plc, and Sterling Bank, have “Low” level of insider lending. The remaining 10 banks have levels ranging from “Moderate”, “Severe” and “High”, meaning that insider lending is still high in most of Nigerian banks.

In a new data sent in by Afrinvest on Wednesday, the research firm said, “Indeed, our analysis of the severity of insider lending was based on FY: 2016 audited report and the total value for Guaranty Trust Bank is N438,857,000, representing 0.028 per cent of the total loan book of N1,590,083,552,000, which would be classified as ‘Low’ according to our 2017 Banking Sector Report. GTBank’s ratio of 0.028 per cent is one of the lowest in the industry as at FY:2016.”

GTBank on Wednesday also said its data showed that it had very low level of insider lending, contrary to the severe level classification of the bank in the earlier report by Afrinvest.

The lender also said that as of June 2017, it had the lowest level of insider lending in the industry and all the loans were performing.

GTBank said, “We wish to categorically state that this position is completely wrong as the bank’s exposure to insider-related parties as of June 2017 was N386,710,000; this represents 0.028 per cent of gross loans in the sum of N1,374,077,859,000 and 0.08 per cent of shareholders’ funds in the sum of N506,550,985,000.

“Aside from the bank’s insider-related lending position being very low, all the underlying facilities are performing.”