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Western EuropeApril 6 2008

London calling

One strategy that Nigerian banks are following to boost return on capital is setting up shop in London. Nick Kochan explores the challenges they face.
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Morohunke Bammeke was in celebratory mood. The managing director of Guaranty Trust Bank (GTB) UK had just received authorisation from the Financial Services Authority (FSA) to set up GTB bank in London. This was the culmination of a two-year process of form filling and meetings with the London regulators. The bank could at last start to attract deposits and develop relationships with UK-based banks, knowing that its operation was for real and not merely preparatory.

Prospects in London are great, says Ms Bammeke, but it will be tough going. “Competition is keen, and the cost of doing business is high. We are here for the long haul. During the first year, we want to establish relationships, we want to bed down our systems and we don’t want to expand too quickly. We don’t want our quality of systems to decline.” GTB starts with a £20m capital base.

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