Guaranty Trust Bank Plc, Nigeria’s largest lender by market value, plans to expand its operations in the rest of Africa over the next three years in a bid to triple the pace of earnings growth.

“The bank plans to open in one other country, probably Tanzania, Mozambique or Angola to deepen its retail banking in that region,” Chief Executive Officer Segun Agbaje, 49, said in an April 9 interview in Lagos, Nigeria’s commercial capital. “Adding another country will give us a critical mass of population to drive a very profitable franchise.”

The expansion would support a target for accelerating profit growth to 15 percent a year in 2016 from 4 percent, said Agbaje. Acquisitions would also help boost the contribution of earnings outside Nigeria to 10 percent of the total by that date, he said. Guaranty Trust Bank bought 70 percent of Fina Bank Group two months ago to gain entry to markets in Kenya, Rwanda and Uganda, adding to its presence in five West African nations aside from Nigeria.

Nigerian lenders are recovering after a 620 billion-naira ($3.8 billion) central bank bailout of the financial system in 2009. Exotix Ltd. said last month that it had a “strong bias” toward the country’s banks because of their growth potential, with almost half of the more than 170 million Nigerians lacking access to finance.

Guaranty Trust plans to open 25 more branches in Nigeria this year, said Agbaje, adding to the 211 it has in the country, according to its website. The bank wants to increase retail deposits by 20 percent to help offset tougher regulatory requirements, he said.

Reserve Requirements

The CEO said Guaranty Trust earnings were crimped by 15 billion naira last year after the central bank increased cash reserve requirements on deposits made by government ministries, agencies and state-owned companies and instructed lenders to cut the fees and commissions they charge customers. Net income climbed 9 percent to 92.6 billion naira in 2013, Guaranty Trust said on March 14.

The stock rose 0.6 percent to 27.20 naira in Lagos trading yesterday, bringing this year’s gain to 0.7 percent. The Nigerian SE Banking Index, which tracks the 10 largest lenders in Africa’s biggest oil producer, has declined almost 14 percent over that period.

Source: Bloomberg (by Emele Onu)