Group Managing Director of Guaranty Trust Bank Plc, Mr. Segun Agbaje, has given reasons why the bank was not enmeshed in the toxic assets trap arising from the power privatisation programme of the Federal Government.
Giving a breakdown of the company’s performance in the 2017 financial year in Lagos, Agbaje said the management took a position from the onset of the programme that it would not be part of the power sector funding arrangement since it was not professionally structured.
“We never participated in the power privatisation programme and so we have no exposure to the power sector. Right from the beginning, we took a position that what was needed for the programme was equity and not debt. And when we saw they were bent on driving the process with debt, we stayed off which is the reason we are not exposed to the sector today.”
He said the bank’s decision not to go into the power sector would remain until government and regulators apply the necessary strategies to make investment in the sector safe and secure. According to him, the two main sources of funding that banks use to play their financial intermediation role are shareholders’ fund and customer deposits, adding that while investors want profit on their investment, depositors want to have their money whenever it suits them against which his bank would not get involved in businesses that would jeopardise such aspirations.
The GTB boss also said the bank was currently not vulnerable to the Nigerian public sector and would therefore not be affected by the withdrawal of government’s deposits from commercial banks, stressing that much of its revenue in the last financial year was driven by its 12 million retail customers spread across the country.