In a booming digital banking market in Sub-Saharan Africa, Guaranty Trust Bank (GTBank)—one of Nigeria’s top five lenders—is racing ahead by getting more customers to bank online. It has been reducing the communication gap with its customers since 2006, when it opened its first self-service contact centre, allowing customers to conduct 90% of their banking transactions from home.
In August 2018, GTBank started offering its banking services on WhatsApp, a social media app. The lender’s digital services extend beyond banking to online payments for services such as applying for passports. The bank also gets considerable revenue from upstream oil operations in Nigeria. With oil prices improving and local companies ramping up operations in areas such as the Niger Delta region, GTBank is expected to continue to play a crucial role in providing loans to energy companies.
Although GTBank is profitable, it is exposed to the risks posed by volatile oil prices and the weak Nigerian economy, which has led to high levels of bad loans for Nigerian banks. In the six months ended June 30th, 2018 GTBank’s net interest income fell by 2%, to N161.9bn (US$4.5bn), owing to lower interest income on loans and advances and a fall in yield from fixed-income securities.
In traditional banking, GTBank has held its ground despite falling interest income and assets. It has done so by aggressively cutting costs and reducing its non-performing loan (NPL) portfolio. In the first half of 2018, the bank’s credit impairment charge fell by 72% year on year.