Finally, Global Trust Bank, owned by Nigeria’s Industrial and General Insurance Company, has received a new lease of life – a Shs 25 billion (about $12.5 million) bailout package from its shareholders.
The company recently released a press release which pointed out that the fresh capital is meant to “shore up the company’s capital base and competitively position it for business growth.” The press release further adds that “the injection of capital into the bank by our shareholders is a measure of their commitment to the enterprise as well as a restatement of their firm belief that Global Trust Bank has a great future.”
What the press release does not say is the bank’s financial dilemma, where huge loans and advances have gone bad, while the banks’ reserve capital fund had almost been stripped bare throughout the first three quarters of last year. This has led to a lot of speculation within the industry about the bank’s financial health.
The bank, in its first full year of operation in Uganda, is expected to announce a loss in the region of $1.5 - $3 million for 2009 when it finally releases its financial statement anytime from now. That announcement is expected to come under sharp focus by shareholders of National Insurance Corporation, Global Trust Bank’s sister company. NIC had benchmarked its profitability for 2010 on the strong synergies it has with Global Trust Bank.
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