GROWTH STRATEGIES AND CORPORATE SURVIVAL OF SELECTED MONEY DEPOSIT BANKS IN ENUGU METROPOLIS ENUGU STATE NIGERIA

ABSTRACT

Businesses  all over  the  world  are  constantly  developing  strategies  to  survive  the pressure of competition; this situation is not different from that of Nigerian banks. Therefore, this study assessed growth strategies as they relate to corporate survival of Nigerian money deposit banks in a competitive and dynamic business environment. Specific objectives were to: investigate the extent to which merger and acquisition strategy  contribute  to  corporate  sustainability;   determine   the   extent  to  which diversification to new markets increases competitive edge of money deposit banks in Nigeria;   ascertain  the effect of branch expansion on  market share;   ascertain the effect of product differentiation on customer retention. The study adopted the cross- sectional  survey  design.  The  population  was  736  that  comprised  all  permanent employees of Zenith Bank plc, First Bank of Nigeria plc, United Bank for Africa plc and Guaranty Trust Bank plc.  A  sample size of 377 was obtained  using Cochran formula  for  finite  populations.  Data  collection  was  by  questionnaire  and  oral interview.  Cronbach’s  Alpha method  was used  to determine  reliability of the data collection   instrument,  and  a  reliability   coefficient   of  0.87  that  depicted   item consistency, was obtained. Experts from both the industry and academia ascertained the face validity of the instrument. Pearson Product Moment Correlation Coefficient and Z-test  were the test-statistics  used  for data  analysis.  The probability  level of acceptance was at 5% level of significance. The results of this study are: To a large extent, merger and acquisition strategy  contributed  to corporate sustainability (r =

0.814;  p  <  0.05).  Diversification  to  new  markets  to  a  large  extent  increased competitive edge of money deposit banks in Nigeria (r = 0.877; p < 0.05). The effect of branch expansion on market share was significant (r = 0.749; p < 0.05). Product differentiation had a significant effect (r = 0.89; p < 0.05) on customer retention. The study concluded that there was a significant relationship between growth strategies and  corporate  survival  of  money  deposit  banks  in  Enugu  metropolis.  The  study recommends that: money deposit banks in the study area should make the best use of merger and acquisition opportunities to sustain their corporate survival; professional feasibility and viability appraisals are crucial to diversification to new markets so as to aid risk management and  control; physical, socio-political,  economic, religious, legal and political considerations of the new area under deliberation are critical to branch  expansion.  Management  must  endeavour  to  be  armed  with  adequate  but necessary data and information on the new market the organization is venturing into so  as  to  plan  business  operations  that  are  consistent  with  need  of  the  target population; given that change is the only constant and our world is ever  evolving, attempt must be made to move with the times in introducing modern thoughts which advance the product of the organization.

CHAPTER ONE INTRODUCTION

1.1       Background of the Study

The business environment of the 21st century has been more volatile and challenging than  earlier  centuries  (Onodugo  and  Ewurum,  2013).  Zuzana  (2006)  asserts  that today’s organizations have to deal with dynamic and uncertain environments. In order to  be   successful,   organizations   must  be  strategically   aware   of  the   changing environment.   They  must   understand   how   such   changes   in   their   competitive environment  are unfolding.  They should  actively look for opportunities  to exploit their strategic abilities, adapt and seek  improvements in every area of the business, building  on  awareness  and   understanding   of  current  strategies  and  successes. Organizations  must be able  to act quickly in response to opportunities and barriers (Pearson,   1990;    Robbins   and   Stuart-Kotze,   1990).   In   a   hyper-competitive environment,   companies  must  continually  improve  their  people,  processes,  and technologies  to  create  a  competitive  advantage.  The  ability  to  accurately  predict consumer  demand  in  addition  to  the  capability  to  rapidly  react  and  readjust  to environmental changes, supply and demand fluctuations; separates the winners from the losers (Rai, 2005).

Jonathan  (2011)  submits  that  in  this  highly  competitive  environment  at  present, businesses  are always  coming  up with new  ideas that turn markets  upside down. Hence organizations’ management are put under pressure not only to sustain current trading performance but to improve it through increased margins, reduced costs and greater  market  share.  Too  often,  companies  employ  strategies  to  exploit  external opportunities rather than first looking internally to see what operational inefficiencies are there to be improved. Business firms operate in a society to satisfy individual and societal  needs  through  the  production  of goods  and  services.  Their  decisions  are influenced by what is  happening in the society. The social, economic, and political institutions  that  make up a society constitute in a broad sense, the environment  of business  enterprises,  and the way they work affect  the operations  and fortunes  of every business unit.

The motivating factor for the entrepreneur to go into business is to make profit. The objectives of a business firm, goes beyond profitability only. It includes  growth in

size, increase  in market share, innovation,  and social objective.  The realization  of these objectives will be determined largely by events in the environment. Specifically, the environment of business comprises those activities that can hinder or facilitate the achievement   of   its   objectives.   They   include   population,   technology,   social infrastructure, economic system and competitors. To this end, this study focuses on the impact of the activities of the competitors on a business organization,its survival and growth strategies adopted.

Customers have a choice to go elsewhere if a particular firm’s products or services do not meet their needs. They can switch brand and patronize a competitor  who  may claim to provide a better product or service.  This means that the  activities of the competitors in the same industrial sector may invariably affecta firm’s prospects and operations.  The type and quality of product that  competitors  offer, the prices they charge  for their  products  or services,  their  size,  locations,  reputation,  distribution channels and usual stock level are some of the things about competitors which shape the operations of a business. No organization can ignore the actions and decisions of its competitors in a modern economy characterized by competition.

Nigeria  operates  an  open  market  economy  where  competitions  thrive.  Increased competition  is being driven by many factors,  including the  emergence  of a global market place, the risein the number of firms, new technology that makes it easier for firms  to  enter  new  markets  and  ever-  increasing  pressure  from  markets  to  raise shareholders’   value.   In   particular,   the   frenetic   atmosphere   of   mergers   and acquisitions, along with the  increased number of large institutional investors, imply that firms which do not cut costs and improve financial performance face swift action in equity markets.  This also indicates that such companies are less able to insulate workers or invest in public goods such as research or employee training. For instance, in the United States of America, three-fourth of 531 corporations surveyed, identified economic  pressure  from  competitors  as  one  of  the  primary  factors  enhancing motivation in their organizations (Cappelli, 2003).

In 1965, IBMfaced 2,500 competitors for all its markets. By 1992, it faced  50,000. However, IBM is not alone in feeling outside pressure as industries that were formerly sheltered  from significant  competition  such as  telecommunication companies  now faced growing competition. For instance, NITEL has been kicked out of the market by

an array of competitors  in the Nigerian  telecommunication  market  such as  MTN, Airtel, Globacom, Starcomm, Etislat, Intercellular etc. Stable industries have become dynamic.  For  example,  insurance  was  once  a  stable  industry  in  Nigeria  with  a distribution system of local insurance agents;now, it isundergoingsignificant  change, with competitions emerging from foreign companies and banks selling insurance, etc.

Adesina,  (2003)  notes that competition  ensures  that we change  our way of  doing things. It ensures that we raise our quality bar to international standard. Again, it can also be said that fair and equitable competitors help to achieve  appropriate pricing level.As a result of fierce business competition  in the  market, the number of firms being  born  and  dying  every  year  had  grown  as  more  innovative  and  efficient companies take their place, while firms that cannot grow fast are knockedout of the market easily and quickly. Fiercebusiness competitors are also causing companies to constantly develop new products and  services in order to gain new market and by extension benefit the consumers because their needs are more specifically addressed.

Advertising  and  sale’s  promotion  play  major  role  in  influencing  competition  in Nigeria to the extent that it can determine the fortune of any company. A  company that fails to advertise will remain in obscurity and may find it difficult to grow and expand. This accounts for the reason why many multinationals as well as  indigenous companies which are regarded as market leaders such as Coca-cola, Guinness (Nig) Plc, Nigerian Breweries Plc, Nigerian Bottling Company Plc, MTN communications, West Africa Milk Company Plc, First  Bank  of Nigeria Plc, etc. budget millions of naira annually for advertisements and sales promotion. This development has resulted in   aggressive    competition    in   the   Nigerian    Banking    industry.Consequently, researchinginto the growth strategies adopted by some of the leading Banks in Nigeria to  survivebecomes  very crucial  considering  the  strategic  growth-inducement  roles played  by  competition  in the  overall  growth  and  survival  of any organization  in modern economy.

1.2       Statement of Problem

Recently,  the  Nigerian  business  environment  as  an  emerging  economy  has  been characterized  by competition  which is now threatening the growth and  survival of many corporate establishments and such establishments  need to wake up from their present  state  if they  must  survive  in the  next  millennium.  Prior  to  the  industrial

revolution, producers were regarded as kings and could produce anything since there were ready markets for them irrespective  of quality,  price etc. After the  industrial revolution however, productivity increased beyond measure and competition became tense. As a result, the royal crown of producers disappeared forcing them to be at the mercy of consumers. Mere production of goods and services was no longer sufficient to give a company a competitive edge over  others but polices and strategies put in place to achieve market leadership.

In view of the rigorous competition that has characterized the economic system, it is essential  for  companies  to  exploit  circumstances  and  to deal  with  the  actual  and potential  opportunities.  Formulation  of policies  and  strategies  that  will give  them competitive  edge  has  become  a  must  in order  to  grow  and  survive.  In addition, business  activities  in  the  world  today  take  place  under  conditions  of  great  risk, uncertainties and intense competition. It is no longer possible to rely on an “invisible hand” to regulate business operations and place any firm in a relatively strong footing in the market place.

The greatest challenge for a successful organization is change. Many good ideasupon which products and services should be offered, how they should be  produced  and delivered, have suddenly become obsolete in the face of change. Many organizations find it difficult to cope with changing customer needs, new technology, innovation, etc.and as a result, they fold up or are taken over by more aggressive competitors. Business  failures  and  near  failures  are frequent  occurrences.  Often the plights  of failing firms come as a great surprise to managers and shareholders alike. What may result in constant business failures therefore is the inability to recognize opportunities and not so much the non-existence of opportunities in any business line or any sale whatsoever. Business failures like all mundane failures are never divine. Therefore, in recognition of the above challenges, this research is undertaken to critically look at the causes of high risk of business failure and suggest practical business strategies for growth  and  survival  of  Corporations  in  a  competitive  business  environment  in Nigeria.

1.3       Objectives of the Study

The aim  of the  study is to  critically analyze  the  growth  strategies  and  corporate survivalof firms in a competitive business environment. The specific objectives are to: (i)        Investigate the extent to which merger and acquisition strategy contributes to

corporate sustainability.

(ii)       Determine  the  extent  to  which  diversification  to  new  markets  increases competitive edge of money deposit banks in Nigeria.

(iii)      Ascertain the effect of branch expansion on market share.

(iv)      Establish the effect of product differentiation on customer retention.

1.5       Research Questions

The following research questions were formulated in line with the objectives of the study:

(i)        To what extent doesmerger  and acquisition strategy contribute  to  corporate sustainability?

(ii)       To what extent does diversification to new markets increase competitive edge

of money deposit banks in Nigeria?

(iii)      What is the effect of branch expansion on market share?

(iv)      What is the effect of product differentiation on customer retention?

1.5       Research Hypotheses

Based  on  the  research  questions,  the  following  research  hypotheses  have  been formulated:

(i)        Merger and acquisitionstrategy contributes to corporate sustainability.

(ii)       Diversification to new markets, to a large extent increases competitive edge of money deposit banks in Nigeria.

(iii)      Branch  expansion  has a significant  effect  on market  share  in the  Nigerian commercial banking industry.

(iv)      The effect of product differentiation on customer retention in the commercial banking sector is significantly positive.

1.6       Significance of the Study

This study will be of benefit to the following:

Management of Banks

At a macro level, the significance of this research will be the development of management  strategies  on  how  best  to  promote  the  growth  of  corporate businesses  especially  in  the  banking  industry  so  as  to  reduce  the  rate  of competition induced business failuresin Nigeria.The research will also assist the organizational management teams with practical  implementable tools that can be applied as critical success factors when challenges to growth emerge as a result  of  competition  so  thatorganizations  that  have  lost  significant  market shares and customers to competitors will recover them.

Shareholders

Business  organizations  confronted  with  intense  competition  from  established organizations will also be exposed to how best to survive and grow in the midst of competition.

Entrepreneurs

From a micro perspective, the significance of this research is to expose to the entrepreneur alternative growth strategies aimed at improving profitability and stability of the organization.  These benefits will affect  the entrepreneur  and their dependents- the employees of the business, the communities where these businesses  are situated as well as regional economies.  In addition, this study will serve as a reference tool for future researchers and students in the field of business administration.

1.7       Scope of the Study

The study was limited to growth strategies and corporate survival of selected firms in a competitive business environment.The  study also focuses on the growth strategies and corporate survival of the following Nigerian banks: First Bank  Nigeria (FBN), Zenith Bank Plc, United Bank for Africa (UBA) and Guaranty Trust Bank (GTB). The choice of these banks is informed by the fact that they have maintained a good competitive  position  over  time  in the  Banking  industry.The  geographical  area  of coverage of the study was limited to the regional branches of the selected banks in the

South East  Region  of Nigeria.  The  study covered  valuable  information  including reports, facts and figures between 2012 and 2015.

1.8       Definition of Key Terms

Corporate: Thisrelates to business corporations or a particular business corporation. Survival: This is the ability of an individual or an organization to continue to exist in spite of difficult circumstances.

Growth:  This  is  the  increase  in  organizational  size,  number,  structure,  strength, wealth, and/or importance.

Strategy: A strategy is a general plan or set of plans intended to achieve something, especially over a long period.

Business Environment: This is the setting or surrounding in which human activities like production, extraction, purchasing or sale of goods are performed for earning or profit maximization.

Corporate Strategy: This is defined as the determination of the business in which a company will compete and the allocation of resources among the business.

1.9        Background Information on Banks under Study

For the purpose of this study, five (5) banks werestudied, namely: Zenith Bank Plc, First Bank Nigeria Plc, United Bank for Africa (UBA) Plc and Guaranty Trust Bank Plc. On the general level, these banks have maintained a good  competitive position over time. This study will be carried out to determine how  growth strategies have contributed  to the survival of these banks despite stiff  competition  in the banking industry.According  to  Vanguard  Newspaper  of  27th  July,  2014;  the  above  listed banks were among the nine (9) Nigerian banks to make the top 1000 World Banks ranking by Tier One Capital in the 2011 edition by The Banker magazine as published in its current edition.  From a statement signed by the Country Representative of The Banker, Mr. Kunle Ogedengbe,  Zenith Bank and First Bank are the top two ranked banks in Nigeria. While Zenith is ranked 296, First Bank of Nigeria Plc is ranked 310.

Other Nigerian banks that made the Top 1000 World Banks list are Guaranty Trust Bank ranked 444, Access Bank (495), United Bank for Africa (513), Fidelity Bank (567), First City Monument Bank (586), Diamond Bank (650) and Skye Bank (657). Apart from featuring in the top 1000 World Banks, the banks also made the Top 25 banks in Africa with Nigeria being the only country in  the  continent that has nine

banks in the African Top 25 ranking schedule. The Banker magazine, a publication of the Financial Times of London also released a regional list of top 200 banks in Africa. Nigeria led the pack with 11 banks featuring in the Top 50. Other leaders were North Africa and South Africa. Among the listed Nigerian banks were Zenith, First Bank, Guaranty  Trust,  Access,  UBA,  Fidelity,  First  City  Monument,  Diamond,  Skye, Stanbic IBTC, and EcoBank Nigeria.

Zenith Bank Profile

Zenith Bank Plc (‘Zenith’ or ‘the Bank’) is a publicly quoted Nigerian company that was  incorporated  as  Zenith  International  Bank  Limited  in  May  1990.  The  Bank commenced local operations in June 1990 and became known as Zenith Bank Plc in

2004 to reflect  its status as a public company.  Zenith  operates under a  Universal Banking License, which allows it to carry out commercial and  investment banking services.The Bank’s head office is located at Zenith Heights, Ajose Adeogun Street, Victoria Island, Lagos. The Bank operates through a branch network of 200 branches and 85 cash offices. Fifty six branches and 29  cash offices were established  in the period under review.

The Bank has a representative  office  in Johannesburg,  South Africa  and in  April

2007,  it  opened  a subsidiary  in  London,  United  Kingdom.  The  Bank  operates  a relatively decentralized  structure,  with its branches  grouped under  eight zones and headed  by two  Executive  Director.  Other  key  groups  including  the  Credit  Risk Management  Group, Corporate  Banking Group,  Strategy & Business Development Group, Energy Group and the Operations Group are overseen by Executive Directors and  other  members  of  senior  management.  Loan  approval  is centralized,  and  the Bank’s Credit Risk  Management  Group reports directly to the CEO.The Bank also has an audit committee made up of three (3) Non Executive Directors and three (3) shareholders representatives (elected at the annual general meetings).

Zenith Bank mobilizes deposits from companies, individuals, and the public  sector. The Bank’s target for risk asset creation includes multinational  companies, top tier local corporate, medium sized companies and high net worth individuals. The Bank has an aggressive liability generation strategy that harnesses its branch network and a range of liability generation products to mobilize deposits. These include an array of e-banking products, card and payment solutions. As at year ended 30 June 2007, the

Bank had deployed  242 ATMs.  The Bank’s customers  have access  to over  1,200

ATM’s by virtue of being part of the Interswitch ATM network. Zenith uses an online real time banking application called Phoenix to process its transactions. Phoenix runs on an IBM AIX operating system (Version 5L) and is deployed on IBM P690 servers.

The Bank’s branches are linked to head office and to each other via Vsat and wireless radio link and NITEL dial up connections as back up. The Bank is in the process of migrating to a more robust software called TE MENOS  T24.With  a balance sheet footing of N1.1 trillion as at year ended 30 June  2007,  Zenith Bank is a dominant player  in  the  Nigerian  banking  industry.  Over  the  years,  the  Bank  has  recorded considerable growth, while upholding robust performance. The Bank’s nonperforming loans to total loans ratio has ranked amongst the lowest in the last five years and stood at 1.8% as at year ended 30 June 2007. The Bank has a strong liquidity profile and controls an estimated 14% of total local currency deposits. In the year under review, profitability remained stable, with pre-tax return on average equity of 22.5% and pre- tax return on average assets of 2.7%. Pre-tax ROE has averaged 27% in the last three years.

Zenith is one of the 10 settlement banks in Nigeria. The Bank is also a primary dealer and market maker for Federal Government bonds as well as a money market dealer for treasury bills issued by the CBN.Zenith  Bank has  transformed into a financial conglomerate  offering  various  financial  services  through  its  subsidiaries.  These subsidiaries include:

Zenith Securities Ltd (99.92%) Stock broking

Zenith General Insurance Co. Ltd (80.12%) Insurance Zenith Bank (Ghana) Ltd (100%) Commercial Banking Zenith Pension Custodian Ltd (99%) – Pension Admin Zenith Capital Ltd (99.99%) Investment Banking

Zenith Registrars Ltd (99.98%) Securities Registrars

Zenith Medicare Ltd (79.71%) Health Insurance Management

Zenith Trust Co. Ltd (99.95%) Trusteeship Zenith Life Assurance Ltd (81.23%) Insurance Zenith Bank U.K. (100%) Wholesale Banking

The Bank’s  foreign  correspondent  banks  include  Citibank N. A., (New  York  and London), HSBC Bank, South Africa, Deutsche Bank, (New York and London), Fortis Bank London, ANZ Group Limited  (London),  Commerzbank  AG, Frankfurt, BNP Paribas, Paris, JP Morgan Chase Bank (New York & London) and Zenith Bank (UK) Ltd.

First Bank Nigeria

First Bank is the last of the old generation banks operating in the Nigerian banking sector. The bank was incorporated in Liverpool as the bank for British West Africa in

1894. It acquired  African Banking  Corporation  which was established  in 1892.  It opened its first international branch in Accra, Ghana in 1896 and was incorporated locally in 1969 as the standard bank of Nigeria Ltd. First Bank  was listed on the Nigerian stock exchange in 1971. In 2002, it established the first offshore financial subsidiary of a Nigerian owned bank in UK. In 2005, it acquired two banks- MBC international  Bank Ltd and FBN (Merchant  Bankers)  Ltd and announced  business combination  discussions  with  Ecobank.  In  2007,  first  bank  floated  the  first-ever hybrid capital offering out of Africa which was the Nigeria’s biggest offer.

Its current solid market position is partly the result of its longevity operating  in a country of intrinsically  high operating  risks. More tangibly,  the franchise  benefits from five million retail customers (consumer and small and midsize enterprise) and is one of the largest  branch networks  in Nigeria,  with 610  branches  and over 1,300

ATMs  at March  31, 2010.  First Bank  has an excellent  retail franchise.  This  was witnessed   recently  during  the  2009  banking  sector  turbulence  when  the  bank benefited from strong deposit inflows throughout a period of tightened liquidity. This partly reflects the fact that First Bank was one of the first five banks to successfully pass the CBN’s audit in August 2009. In contrast to the  strong retail franchise, the corporate banking franchise has in our opinion been somewhat overshadowed by new peers. However, although First Bank’s business mix is limited it does compare well with domestic  peers. At Dec. 31, 2009, the  retail and middle tier corporate sector contributed  49%  of  deposits  and  35%  of  loans.  The  top  tier  corporate  sector contributed 40% of deposits and 55% of loans, and the public sector contributed 10% in both deposits and loans.

United Bank for Africa

United Bank for Africa Plc (UBA) is the leading financial service institution in West Africa. Listed on the Nigerian Stock Exchange, UBA is rapidly evolving into a Pan African full service financial institution.The history of UBA dates back to 1949. UBA was the first Nigerian bank to list on the Nigerian stock exchange in 1970. In August

2005, UBA merged with Standard Trust Bank and acquired Continental Trust Bank.

The consolidated UBA was borne out of a desire to lead the domestic market to a new era of global relevance by championing the creation of the Nigerian consumer finance market,  leading  a private/public  sector partnership,  supporting  the  acceleration  of Nigeria’s economic development, and growing the institution into a one-stop financial services institution.

UBA has over 7.2 million customer accounts and has 620 branches in Nigeria with

12,891  employees.  It maintains  global operations in three continents  and has  over US$12.1 billion in assets. UBA is listed on the Nigerian Stock Exchange (NSE) and has an OTC GDR program with the Bank of New York.Share Price  as at Sept 27,

2011 was N3.40, with a Market Capitalization of N109.9 billion (US $0.71  billion) The UBA  group  has 7 strategic  business  units  and 4 strategic  support  units. The business units are;

1.        Nigeria  North:  UBA  Nigeria  North is split  into  core north and Abuja.  It covers the Northern region of Nigeria, whose economy is largely agrarian in nature. The region boasts thriving construction,  real estate,  agricultural  and textile sectors and we provide services tailored to meet the need of key players in these sectors.

2.        Nigeria South: UBA Nigeria South is split into South East and Lagos/West bank. It covers the southern part of Nigeria constituting 18 of the 36 states of the Federation. It provides services to large multinational and local customers across various industry lines including Oil and Gas,  conglomerates,  FMCG, construction.  Its extensive branch network and  coverage enables it provides quality services.

3.        UBA Africa: UBA Africa was set up to drive change in the future of African banking by taking advantage of trade financing opportunities across continent. Where  similar  forces  are in play,  it can leverage  on  the  group’s domestic success, experience  and technology platform to  deliver  superior  services in

these markets.  Our Africa business  is split into West Africa and  Southern, Eastern and Central Africa.

4.        UBA Corporate and International  Banking: UBA international  has  been created to spearhead the Bank’s global expansion strategy with the mandate to provide  wholesale,  correspondent,  commercial,  consumer  and  transactional banking services across the group.

5.        UBA Institutional  Banking & Subsidiaries:  UBA Institutional Banking  is responsible  for developing and managing business  relationships  with  banks and  other   financial   institutions   across   the  globe  and   integrating  these relationships with the rest of UBA

6.        UBA  Global  Transaction   &  Consumer   Bank:  The  growing   African economy  and  increasing  levels  of  income  provides  huge  opportunities  to extend retail credit first in Nigeria and then across other African countries in line with UBA’s regional expansion drive.

7.        UBA Products Sales Division: Established to facilitate the distribution of the group’s  growing  product  lines  leveraging  on  UBA’s  strong  distribution network across the globe.

UBA  currently  operates  from  Nigeria,  Ghana,  Cameroon,  Cote  d’Ivoire,  Uganda, Sierra  Leone,  Liberia,   Burkina  Faso,  Benin  Republic,   Senegal,   Chad,  Kenya, Tanzania,   Gabon,   Zambia,   Guinea   Conakry,,   Democratic   Republic   of  Congo, Mozambique and Congo Brazzaville, USA, Rep office in Paris, Cayman Islands and the UK. In addition to these, we have obtained license to operate in Mali. Operations should fully commence in Mali before the end of 2011.

Guaranty Trust Bank

Guaranty Trust Bank is a foremost Nigerian financial institution with vast business outlays  spanning  Anglophone  West  Africa  and  the  United  Kingdom.  The  Bank presently has an Asset Base of over 1 trillion Naira, shareholders’ funds of over 190

Billion Naira and employs  over 5,000 people in Nigeria, Gambia, Ghana,  Liberia, Sierra Leone and the United  Kingdom.Guaranty  Trust Bank was  incorporated  as a limited liability company licensed to provide commercial and other banking services to the Nigerian public in 1990. The Bank commenced operations in February 1991,

and has since then grown to become one of the most respected and service focused banks in Nigeria.

In September 1996, Guaranty Trust Bank became a publicly quoted  company and won  the  Nigerian  Stock  Exchange  President’s  Merit  award  that  same  year  and subsequently in the years 2000, 2003, 2005, 2006, 2007, 2008 and 2009. In February

2002,  the  Bank  was  granted  a  universal  banking  license  and  later  appointed  a settlement bank by the Central Bank of Nigeria (CBN) in 2003. Guaranty Trust Bank undertook its second share offering in 2004 and successfully rose over  N11  billion from Nigerian Investors to expand its operations and favourably compete with other global financial institutions.  This development  ensured  the  Bank was satisfactorily poised to meet the N25 billion minimum capital base  for banks introduced  by the Central Bank of Nigeria in 2005, as part of the regulating body’s efforts to sanitize and strengthen Nigerian banks.

Post-consolidation,  Guaranty Trust Bank Plc. made a strategic decision to  actively pursue retail banking. A major rebranding exercise followed in June 2005, which saw the Bank emerge with improved service offerings, an aggressive expansion strategy and its vibrant orange identity. In 2007, the Bank entered the history books as the first Nigerian financial Institution to undertake a US$350 million regulation S Eurobond issue and a US$750 million Global Depositary Receipts (GDR) Offer. The listing of the GDRs on the London Stock Exchange in July that year made the Bank the first Nigerian Company and African Bank to be listed on the main market of the London Stock Exchange.

In December 2009, Guaranty Trust Bank successfully completed the first tranche of its $200 million corporate bond targeted at increasing the depth of its operations in West  Africa  and  Europe  in  the  next  couple  of  years.  Guaranty  Trust  Bank  Plc provides a full range of commercial, investment and retail banking products/services to its discerning corporate, commercial and retail customers.The Bank has a corporate banking bias and strong service culture that have enabled it record consistent year on year growth in clientele base and key financial indices since its inception in 1990. Its operation  style,  staff  conduct  and  service  delivery  models  are  built  on  8  core principles aptly dubbed; The  Orange Rules in line with the Bank’s vibrant Orange corporate colour.

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