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Chairman of the Board of GCB Bank, Jude Kofi Arthur, has indicated that there is a general decline in the growth of total assets of banks from 30.4% in 2016 to a low of 15.3% in 2017.
He said, asset quality has worsened from 17.3% in December 2016 to 21.6% in December 2017. However, there is a general decline in interest rate as inflation dropped 3.6% from 15.4% in December 2016 to 11.8% in December 2017.
According to the Chairman, Monetary Policy Rate (MPR) was reduced from 25.5% in December 2016 to 20.0% in December 2017, while the interbank rates dropped almost 600 basis points to 19.34% during the year. The rate on treasury securities, he said also declined; explaining that, the 91-day dropped 3.48% to 13.3%; 182-day dropped 4.72% to 13.8%; and the 1-day shed off 6.5% to 15.0%.
Against this background, Mr. Kofi Arthur intimated that, the GCB Bank Limited recorded a decline in its earnings for the 2017 financial year due to the purchase and assumption of UT Bank Limited and Capital Bank Limited in the year under review.
The Bank’s profit before tax, he said, was declined by 29% from GH¢ 467 million in 2016 to GH¢ 332 million in 2017.
He said, the decline in its profitability was mainly due to the significant increase in the bank’s operating expenses and impairment charges that increased by 30%, which were attributed to the assumption of the two banks.
Mr. Jude Kofi Arthur, made these assertions at the GCB Bank’s 2017 Annual General Meeting (AGM) in Accra on Friday July 6, 2018, at the Accra International Conference Centre.
According Mr. Arthur, the take-over of the two banks undoubtedly had a significant impact on their expenditures, staffing, and systems rationalisation; which mostly affected their bottom-line for the year 2017.
That not withstanding, he said the bank recorded a modest growth of 16% in interest income, following a a significant increase of 119%in in interest expense amid legacy accounts inherited from the assumption.
Mr. Arthur said again that, there was an encouraging growth of 52% in net forex trading income from GH¢ 27million in 2016 to GH¢41 million in 2017.
He indicated that, the non-funds based business of the bank recorded encouraging growth, with Net fees and commissions of 20%, leading to a modest growth of 5.0% in total revenue from GH¢1,071 million in 2016 to GH¢1,124 million in 2017. And as well as recorded a growth of 58.4% from GH¢ 6,075 million in 2016 to GH¢ 9,627 million in 2017, another significant growth in deposits of 63% from GH¢ 4,260 million in 2016 to GH¢6,924 million in 2017.
The bank’s equity he said, also recorded a growth of 15% from GH¢1,060 million in 2016 to GH¢ 1,214 million in 2017.
However, he noted with joy that, GCB Bank was the only Bank listed on the Ghana Stock Exchange to pay dividends to shareholders for the year 2017.
The Bank had also supported communities both large and small, identified with the aspirations of the under privileged in the society. As the Bank’s commitment is not for profit but based on giving back to society, it made contributions totalling GH¢ 5,787,000 towards supporting the society it operates in the areas of Health, Education, Environment and Sanitation.
Looking at possible strategies and the way forward, he expatiated that, the Bank had put in place a four-year strategic plan that will drive its transformation agenda. And the agenda according to him hinges on the breaking new frontiers and leveraging on technology to gain market share.
Source: Sammy Adjei