Guaranty Trust Bank (GTBank) plans to use some of its cash deposits to help grow its loan book by 10 per cent by the end of the year after credit declined in the first half, the bank said yesterday.
The bank expects to boost loans to compensate for a drop in yields from treasury investments.
The chief executive, GTBank, Mr. Segun Agbaje said the bank could earn a yield of about 7-9 per cent on loans compared with cash deposits in foreign banks earning two percent.
Agbaje said the bank would take $700 million to $800 million out of its placements with foreign banks and deploy that into loans.
“We will still see some growth in our upstream (oil and gas) book,” Agbaje was quoted by Reuters to have said.
Loans fell 11 percent in the six months to June following a nine per cent decline last year, the bank said on a call with analysts.
Agbaje said interest income declined as yields on treasury bills fell but the bank would push fees and commissions to boost growth.
GTBank posted 8.4 per cent rise in pre-tax profit to N109.6 billion for the first half while interest income was N117.93 billion versus N129.54 billion a year ago.
Several lenders expect to grow loans this year as the Nigerian economy recovers from a 2016 recession.
Agbaje said he wants to grow profit from African subsidiaries to around 20 percent by boosting the performance of its East African businesses. He said units outside Nigeria accounted for about 12 percent of profit.