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Global Trust Bank (GTB) –Notes from analyst meet - Views on News from Equitymaster
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  • May 3, 2000

    Global Trust Bank (GTB) –Notes from analyst meet

    GTB’s vision is to provide complete range of financial services with leadership in specific areas and to grow profitably in those areas. Its main business drivers are retail, corporate lending, capital markets and treasury.

    Financial Highlights (Rs.m)

    Particulars Mar-99 Mar-00 % change
    Deposits 40,968 61,989 51.3%
    Advances 21,184 32,110 51.6%
    Total Business 62,152 94,099 51.4%
    Net Profit 709 1,086 53.3%
    Business Per Employee 83 100 20.6%
    EPS (Rs) 6.81 8.95 31.4%
    Capital Adequacy 12.0% 13.7% 14.3%
    Net NPAs 2.2% 0.9% -59.5%
    Interest Spread 5.7% 6.3% 9.6%
    Return on Equity 68.1% 89.5% 31.4%
    Return on Avg. Networth 26.7% 32.3% 21.2%

    Particulars Mar-99 Mar-00 % change
    Branches (Nos.) 63 74 17.5%
    ATMs (Nos.) 6 36 500.0%

    During the year, GTB reported excellent financial performance as can be viewed from the above table. The bank has identified retail deposits as its main thrust area. During FY2000, total retail deposits witnessed a growth of 70% to Rs 47.3 bn as against negative growth rate of 65% in corporate deposits to Rs 900 m. GTB’s cost of funds declined to 10% from 11% contributing in increasing operating margins to 42% in FY2000 from 31% in FY1999.

    Treasury Highlights:
    The other profit contributors are forex and money market operations. Forex turnover during the year increased by 50% to Rs 194.7 bn.

    In the money market GTB has fully exploited the scenario of falling interest rate by increasing its volumes. Its trading turnover in this area witnessed a growth of 90% to Rs 284.5 bn.

    Highlights of Investment Banking Division
    This division has two sub divisions (a) Global Securities Banking and (b) Capital markets.

    Global Securities Banking provides depository services to its clients. GTB has achieved substantial business growth through its widespread network of 48 branches. Currently the bank has 1,07,600 active clients and assets under the custody of bank are Rs 305 bn.

    GTB is actively participating in capital markets through new offers in equity, debt and preference. The segment contributed Rs 135 m as dividend, Rs 154 m from sale of equity and Rs 59 m as interest income in FY2000.

    Vision 2001
    GTB aims to increase deposits by more than 25% with a customer base of around 600,000. The bank plans to grow its total fund based assets to Rs 54 bn. As part of its ebusiness initiative, the bank has plans to set up payment gateway in future. ATMs are expected to cross a figure of 100 by December 2000 from the present 36 which is the driving force for its retail activity. Also its has plans to enter derivative markets.

    GTB hopes to increase its profit margins by focussing on retail activity. Also diversification into other areas of business will help it to position itself among the other banks like ICICI Bank and HDFC Bank. At current market price of Rs 60, GTB is available at a P/E of 7 times and Price/Book value of 1.4 times compared to 9 times of ICICI Bank.



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