34399 - GTB VI

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Summary of Investment Information

Project Number

34399

Company Name

GUARANTY TRUST BANK PLC

Date SPI Disclosed

Nov 5, 2014

Country

Nigeria

Region

Africa

Projected Board Date

Dec 8, 2014

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Mar 28, 2024

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 18, 2014
Signed : Dec 24, 2014
Invested : Feb 26, 2015

Sector

Commercial Banking - General

Project Description

Guaranty Trust Bank Plc (“GTBank” or the “Bank”) was incorporated and licensed to operate a commercial bank in 1990. In 1996, the Bank became a public company and was listed on the Nigerian Stock Exchange (“NSE”). In 2001, GTBank was issued a universal banking license from the CBN, allowing it to offer a broad array of financial services, including insurance, asset management, company registration, and mortgage activities. The Bank issued a Global Depositary Receipt (“GDR”) and was listed on the London Stock Exchange (“LSE”) in 2007. In 2011, the Bank divested from its insurance, asset management, and company registrar subsidiaries in line with Central Bank of Nigeria directives mandating banks to divest its holding of non-banking subsidiaries. In 2012, GTBank completed the divestment process of its non-banking subsidiaries by exiting from GT Homes, a primary mortgage institution. Today, GT Bank is a leading full service commercial bank in Nigeria with a network of 227 branches, 49 e-branches, and 1,097 ATMs across Nigeria and offering a wide range of banking and financial services. The Bank has 9 overseas subsidiaries and a presence in 8 African countries.

IFC will offer GTBank a senior loan of up to US$250 million whose purpose will be to support the Bank’s medium to long term funding requirements.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The financing is expected to have the development impact outlined below:

1) Confidence in the Nigerian Banking Sector: GTBank has a strong brand and is widely associated with transparency and disclosure, and financial stability and strength. An investment of this magnitude will send positive signals and improve market confidence in the Nigerian financial sector, including with international investors;

2) Leverage on scope and reach of GTBank''s business into underserved market segments: GTBank is a well diversified financial institution with a complementary focus in sectors that drive economic growth and job creation such as infrastructure, manufacturing, hospitality, agribusiness and SMEs.

3) Demosntration effect: mobilization of funding for the project will encourage other financial institutions and companies to raise capital through syndication thereby deepening access to growth capital

1) Long-Term Capital: proposed funding will provide scarce long-term financing necessary for on-lending to critical economic sectors whilst enabling GTBank avoid maturity mismatches.

2) Financial Sector Development: by investing in GTBank, IFC will continue to reinforce (i) its commitment to the Nigeria banking sector (ii) the long term viability of a strong tier I bank (iii) and its continuous effort to strengthen international best practices in banking including environmental and social standards as well as corporate governance.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-1 according to IFC's Environmental and Social Review Procedures. GT Bank provides retail and commercial banking services to clients in Nigeria. The bank also subsidiaries in Cote d'Ivoire, Gambia, Ghana, Kenya, Liberia, Rwanda, Sierra Leone, Uganda and the United Kingdom. The bank has a significant exposure to high risk sectors such as oil & gas, power and infrastructure project/corporate finance. The overall portfolio risk is thus considered high. The applicable performance requirements are the IFC Exclusion List, the applicable national social and environmental laws in Nigeria and the IFC Performance Standards.

The main E&S risks and impacts relate to the ability of the bank to identify and manage the E&S risks associated with its lending activities as well as the bank's labor standards. GT Bank is an existing client IFC client; in line with IFC's requirements, the bank has an E&S risk management system and an E&S Officer. GT Bank will be required to continue to implement the ESMS and ensure that adequate resources are provided for its implementation. To be fully compliant with IFC's E&S requirement's, GT Bank needs to ensure a consistent approach to E&S risk management; the gaps identified by IFC in the implementation process need to be addressed and confirmation provided to IFC in the form of sample monitoring reports . The bank will also be required to provide additional training to its officers on the E&S risk and impacts of high risk sectors and retain an external E&S consultant to support the bank's activities in these high risk sectors. In addition, the bank needs to develop and implement an ESMS roll-out plan for the subsidiaries outside Nigeria. In relation to the bank's labor standards, as an existing client, GT Bank appears to be compliant with the requirements of Performance Standard 2.

Contacts

For Inquiries About the Project, Contact

Mr. J.K.Olusegun Agbaje
Managing Director
Guaranty Trust Bank Plc
Plot 635, Akin Adesola Street
Victoria Island, Lagos
Nigeria
Tel: +234 (1) 4480740-9

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Local Access of Project Documentation

International Finance Corporation
1st Floor Atlantic House
121 Louis Solomon Close
Victoria Island, Lagos
Nigeria
Tel: +234 (1) 279 9400

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Action Required	Completion Date
Provision of sample monitoring reports	October 31, 2014
E&S risk management capacity building – training and retaining an external consultant	April 30, 2015

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