By Goddy Egene, 05.12.2010
The Managing Director/Chief Executive of Guaranty Trust Bank Plc, Mr. Tayo Aderinkun, has advised investors to embrace electronic dividend (e-Dividend) as a way of overcoming the challenges of unclaimed dividends in the stock market.
Unclaimed dividends, which are over N20billion as at last year, have been one of the issues investors are grappling with in the market. Late or non-receipt of dividends has discouraged some investors from patronising the stock market.
However, speaking at the Annual General of Meeting (AGM) of GTBank Plc last week in Lagos, Aderinokun told shareholders of the bank that the best way out is to go for e-dividend.
“With e-dividend, you do not have anything to worry about because once dividends are declared; your account is credited with the value. Therefore, you need not to wait for dividend warrants that could possibly get lost on the way,” Aderinokun said.
E-dividend, which was launched by the Securities and Exchange Commission (SEC) in 2008, is the electronic crediting of shareholders’ bank accounts with the dividend due to them once they have been approved at AGM.
Some shareholders of GTBank had called the attention of the Board to the unclaimed dividends of the bank that stood at N1.527 billion as at December 31, 2008. Although Aderinokun said the necessary efforts in line with regulatory requirements were being made to let shareholders claim their outstanding dividends, he stressed that the best option is for investors to embrace e-dividend.
GTBank paid a dividend of over N13 billion, translating into 75 kobo per share and a bonus of one share for every four shares already held for the year ended December 31, 2009. The bank recorded more-than-expected performance in 2009 with gross earnings rising from N151.70 billion to N162.55 billion.
Profit before tax stood at N27.96 billion compared with N35 billion in 2008. The drop in the profit resulted from strict stipulations mandated by the CBN, which compelled the bank to make an additional N29.71 billion provision in the review period. Aderinokun said that despite the daunting dynamics of the operating environment, the bank continued its steady progress towards achieving its 2012 strategic goals.
Apart from closing the year with a decent profit, he said the success of the bank’s containment strategies also ensured that the institution maintained and sustained its efficiency with cost to income ratio of 0.67:1.
He said GTBank would continue to focus on its core business and significantly seek creative avenues to meet and surpass the demands of rising clientele, just as the bank would seek to expand into new frontiers, especially into Francophone West Africa.
“Esteemed stakeholders, this year marks our 20th year as a financial services provider of choice. In two decades, we have learnt many lessons, survived numerous challenges but most importantly, we have drawn our inspiration from the immense trust and confidence you have in us. We will not betray that trust,” he assured.