Managing Director/Chief Executive of GTBank, Mr. Segun Agbaje
By Goddy Egene
Directors and other shareholders of Guaranty Trust Bank Plc (GTBank) are to smile very soon as the bank is set to reap N11.9 billion gain from the investment the bank made in an insurance company in 2002.
GTBank had in 2002 acquired Heritage Assurance Limited, restructured it, changed its name to Guaranty Assurance Plc and got it listed on the Nigerian Stock Exchange (NSE). The bank acquired the firm for an equity value of N80.2 million.
However, as at December 31, 2010, the company was valued at N8.082 billion, translating into a capital appreciation of N8.002 billion. And Assur Africa Holding (AAH) has agreed to buy the 67.68 per cent equity of GTBank in GTAssurance for N11.91 billion. This translates into a gain of N11.9 billion.
Announcing the divestment, which is subject to regulatory approvals, GTBank said it was in compliance with the new licensing regime of the Central Bank of Nigeria(CBN).
Shareholders of the bank had given their approval to the divestment at an Extra-ordinary General Meeting held in October 2010.
Commenting on the divestment, Managing Director/Chief Executive of GTBank, Mr,. Segun Agbaje said over the last seven years, GTBank had imparted on GTAssurance, the bank’s unique and enduring culture based on ethical and professional conduct as well as a high level of corporate governance.
“A legacy which has helped project the company from a marginal position (97th in market share) as at 2003 to a leadership position (5th) by 2010. In this regard, we are proud of our contribution to the development and deepening of the Nigerian insurance industry,” he said.
According to Agbaje, with the pedigree of the new buyer, the bank is confident that AAH will continue to promote a culture of corporate governance in GTAssurance that is consistent and compatible with best practice.
He noted that AAH’s robust post-acquisition plan for GTAssurance as well as its support of the GTAssur management team and its strategy to profitably grow the business beyond the bank’s divestment contributed to its selection as the preferred bidder for GTBank’s 67.68 per cent shareholding interest in insurance firm.
He said: “This sale realises significant value for our shareholders. Together with the on-going disposals of our other non-banking subsidiaries, it demonstrates clear delivery of our strategic focus of concentrating the Group’s financial and management resources on our core business of commercial banking, with a view to enhancing our market positioning in the segments where we have strength and scale.”