The Nigerian banking sector has experienced remarkable growth and transformation in recent years, with several major players at the fore.Â
Among these financial giants, we’d focus on two institutions that stand out: Guaranty Trust Bank (GTBank) and Access Bank.Â
A Brief Overview
Founded in 1990, GTBank has become a household name in Nigeria’s banking industry. Known for its innovation, excellent customer service, and strong financial performance, it has consistently ranked as one of Nigeria’s top banks. GTBank’s digital-first approach and commitment to sustainability have also contributed to its success.
Established in 1989, Access Bank has grown significantly over the years through mergers and acquisitions. It has expanded its presence across Africa, aiming to become Africa’s gateway to the world. Access Bank has gained a reputation for its financial inclusivity initiatives, solid corporate governance, and its commitment to sustainability and corporate social responsibility.
Financials 2022
GTB Financials 2022
Guaranty Trust Bank (GTB) reported a profit before tax of ₦214.2 billion for the year 2022. This represents a slight dip of 3.3% from the ₦221.5 billion reported in the previous year, primarily due to a ₦35.6 billion impairment recognized on Ghanaian sovereign securities. Despite this dip, GTB’s financial position remained robust.
The bank’s net loan book showed healthy growth, increasing by 4.6% from ₦1.80 trillion in December 2021 to ₦1.89 trillion in December 2022. Similarly, deposit liabilities witnessed a notable increase of 11.6%, rising from ₦4.13 trillion to ₦4.61 trillion during the same period.
GTB’s balance sheet remains well-structured and resilient, with total assets and shareholders’ funds closing at ₦6.45 trillion and ₦931.1 billion, respectively. The Capital Adequacy Ratio (CAR) remained impressively strong at 24.1%. Asset quality also improved, as evidenced by the IFRS 9 Stage 3 Loans ratio (NPLs) dropping to 5.2% in December 2022 from 6.0% in December 2021. However, the Cost of Risk (COR) inched up marginally to 0.6% in FY-2022 from 0.5% in December 2021, attributed to worsened macros on Probability of Default (PDs).
Access Bank Financials 2022
On the other hand, Access Bank reported robust financial results for the year 2022. The group’s gross earnings reached ₦1,382,773 million, highlighting its strong revenue generation capability.Â
Profit from continuing operations for the group amounted to ₦155,873 million, with total comprehensive income for the year standing at ₦231,235 million. Notably, profit attributable to equity holders of the bank was ₦238,985 million, underscoring the bank’s profitability.
Access Bank has also maintained a healthy loan portfolio, with total impaired loans and advances for the group at ₦176,940 million, translating to a low impaired loans ratio of 3.15% concerning gross risk assets.
Furthermore, the bank has demonstrated its commitment to shareholders through dividends. An interim dividend of 27 Kobo per ordinary share was paid, and the Board of Directors proposed a Final Dividend of ₦1.33 per ordinary share. These dividends provide value to shareholders and reflect the bank’s strong financial performance.
Access Bank’s financial results for 2022 depict a well-performing institution, underlining its capacity to generate earnings and maintain a healthy loan book while providing returns to its shareholders.
The Battle for Dominance
- Branch Network: GTBank has a substantial branch network across Nigeria, making it easily accessible to customers nationwide. In contrast, Access Bank has taken a more aggressive approach by acquiring and merging with other banks, which has expanded its branch network both within Nigeria and internationally.
- Digital Innovation: GTBank has been at the forefront of digital banking in Nigeria, offering innovative products and services. Access Bank, however, has made substantial investments in technology and digital banking infrastructure, positioning itself as a digital banking leader.
- Financial Performance: Both banks have consistently reported strong financial results, with impressive growth in assets, revenue, and profit. The competition in this area is fierce, with each bank striving to outperform the other.
- Corporate Social Responsibility: Access Bank has been recognized for its robust corporate social responsibility initiatives, particularly in areas such as education, health, and sustainability. GTBank has also made strides in this regard, contributing to various community development projects.
- Global Presence: Access Bank’s ambitious expansion strategy has allowed it to establish a notable international presence. GTBank, while primarily focused on Nigeria, has also made moves to expand regionally.
The Merger Factor
One significant development in this banking rivalry was the merger between Access Bank and Diamond Bank in 2019. This strategic move catapulted Access Bank into a dominant position in the industry and considerably expanded its customer base. The integration process was complex but ultimately successful, showcasing Access Bank’s capabilities in managing large-scale mergers.
InvestmentsÂ
Both GTBank and Access Bank have invested heavily in digital banking platforms. GTBank launched its mobile app early on, offering customers convenient access to banking services. Access Bank, on the other hand, introduced “Access More,” a digital banking solution designed to provide a seamless customer experience.Â
Sustainability Initiatives
Sustainability has become a major focus for these banks. GTBank has taken steps to reduce its carbon footprint and promote eco-friendly practices, such as introducing solar-powered ATMs. Access Bank, meanwhile, has been recognized for its “Green Bond” program, which funds environmentally sustainable projects. This eco-conscious competition reflects a broader global trend toward environmentally responsible banking.
Corporate Culture
Each bank has cultivated a unique corporate culture. GTBank is known for its youthful and innovative atmosphere, fostering an environment where employees are encouraged to think creatively. Access Bank, post-merger, has taken steps to integrate the cultures of the acquired banks, creating a diverse and inclusive work environment. These distinct cultures contribute to the banks’ identities and employee experiences.
Customer Engagement
GTBank has been recognized for its creative customer engagement campaigns. Their “GTBank Food and Drink Festival” and “Fashion Weekend” events have gained widespread acclaim, showcasing Nigerian culinary and fashion talent. Access Bank, meanwhile, has focused on financial literacy programs and youth empowerment initiatives. Both banks are actively engaging with their communities in different ways.
Awards and Recognitions
Over the years, both GTBank and Access Bank have received numerous awards and recognitions. GTBank has won accolades for its innovation in mobile banking and corporate governance. Access Bank has been recognized for its financial inclusivity efforts and sustainability practices. These awards serve as a testament to their commitment to excellence.
Regulatory Compliance
Both banks operate within the regulatory framework set by the Central Bank of Nigeria (CBN). Their adherence to banking regulations and standards is essential to maintaining trust among customers and investors. The competition extends to how efficiently they navigate these regulations while delivering exceptional financial services.
Conclusion
Both GTBank and Access Bank have their strengths, with the former excelling in digital innovation and customer-centricity, while the latter’s aggressive growth strategy has expanded its reach significantly.
Nigerian customers stand to benefit the most as both institutions strive for innovative strategies. Their choices will improve services, and ultimately lead to a stronger and more competitive banking sector in Nigeria.
