GTBank, the largest digital banking service provider in Nigeria is considering to restructure as a holdings company. The bank’s CEO, Segun Agbaje, disclosed the plan during the bank’s earnings call for the fourth quarter of 2019.
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A holdings company is a form of financial organization that owns a controlling interest in other businesses, known as subsidiaries. GTBank intends to restructure as a holding company to allow them establish other firms aside banking, said Agbaje.
Earlier before now, GTBank had offered various non-banking services. It operated GTB Asset Management for capital market services and GT Assurance, for insurance services.
GTBank had to abondon these non-banking services, due to a 2010 regulation by the Central Bank of Nigeria (CBN), which forced banks to stop operating their non-banking subsidiaries.
Back then, GTBank sold GTB Asset Management, now known as Investment One. Then GT Assurance was acquired by some investors and was renamed to Mansard Insurance, known as AXA Mansard Insurance today.
“About 10 years ago, we made a decision then looking at the operating environment, that we were going to shed all our subsidiaries and become completely bank-focused,” Segun Agbaje told analysts during the recent earnings call.
“Everything we have seen over the last 2, 3 years, has told us that it’s time to have a bit of a rethink.”
Entering Fintech Space:
GTBank is now restructuring to build and deploy fintech products and provide other social networking, health, insurance and payment services.
Though the bank has recorded 6.6 percent profit increase to ₦231.7 billion ($640.4 million) in 2019 with over 7 million new customers within two years, Agbaje, thinks the performance isn’t sustainable.
“Most banks are growing 5% to 7%. We don’t think that’s sustainable,” he said.
Speaking at a recent social media event in Lagos, “When you take GTBank, which has one of the best valuations in the banking industry, it is valued at a one time book, then you come to the payment space where fintechs and payment companies are being valued at 30x earnings. What is there not to like about this space?”
GTBank believes that by restructing into holdings company, it will be well positioned to win the fintech space in Nigeria with its products and services already in use.
“GTBank is going to win the payment space, and we’re going to win very easily,” said Agbaje.
GTBank’s Fintech Products:
GTBank operates different digital products including digital lending service (QuickCredit), payments processor (GTPay) and Habari, a multi-functional mobile app comprising of entertainment, social networking, video streaming, news, ecommerce, ebooks and payments.
“No matter what anybody says, it (Habari) is the most successful, integrated and interactive platform in Nigeria today”
One of the best competing services from GTBank in the space, is its lending service, QuickCredit. GTBank’s QuickCredit loan service charges 1.33% per month, which is very low compared to other competing loan service providers like Carbon.
“We are basically building our own platforms. In every payment platform space we have a competing product”
Talking about the bank’s revenue so far, he said, “About 30% of banking revenue comes from the payment space”.
GTBank GTCoin Points Reward:
GTBank customers can earn gtcoins by using the banks e-channels, selected banking services and 737 code service for financial transactions.
GTcoins earns can redeem it for awesome deals every month. You can also use your GTCoins to purchase airtime, cinema tickets, amazing flash deals etc. Something similar to the M-Pesa Bonga Points.
GTCoins are accumulated from the first to the last day of every month and must be used within the month. Unused coins reward can not be rolled over to the next month.
GTBank Beta Health Insurance Service:
GTBank launched Beta Health, a health insurance service for instant access to health insurance at a cheaper cost of just N500 per month. The Beta Health service allows its users to access essential health services in over 1,000 hospitals worldwide.
The service is designed in partnership with leading insurance providers to provide health services such as general consultations, treatment for malaria, Ante-natal care, etc, at a very cheap rate.
Beta Health offers:
- Full access to more than 1000 hospitals across Nigeria.
- Comprehensive antenatal care for pregnant women at any Beta Health registered medical centre.
- 4 hospital care/treatment and consultations for malaria and other infections.
- Immunization for children under 5 – Measles, BCG, Polio & Hepatitis.
- Health cover for accidents & other medical emergencies.
- Life insurance coverage, payable to the customer’s family upon permanent disability or death.
- Beta Health also allows you to subscribe on behalf of a third-party; such as relatives, domestic staff, contract workers and employees of small businesses.
The Beta Health service allows GTBank customers and none customers to enjoy cheaper health insurance from AXA Mansard or Leadway Assurance.
Existing customers can easily access the service using this USSD code *737*52*500*50#. None GTBank account holders can enter any GTBank branch and pick a Beta Health form to gain access.
While GTBank is aggressively working to take over the Fitness space, Zenith Bank had previously announced intentions to collaborate with Fintech Platforms and boast digital banking in Nigeria.
In late November 2019, Zenith bank conducted Zenith Tech Fair where it provided funds for winning startups to build and deploy fintech and blockchain products in Nigeria.