The financial statement of First National Bank Ghana for Q1 2023 shows a net loss of GHS 7.8m, which is a decline from the GHS 4m profit recorded in the same period last year.
The bank’s assets, driven by an increase in cash and cash equivalents (GHS 1bn), rose to GHS 3.5bn from GHS 2.6bn in Q1 2022.
The total liabilities also increased to GHS 3.2bn in Q1 2023 from GHS 2.1bn in Q1 2022, with deposits from customers increasing to GHS 2.3bn, indicating an increase in loanable funds and interest income.
However, the bank’s Capital Adequacy Ratio (CAR) fell significantly from 37.24% to 18.57%, which is a cause for concern.
The CAR is an important indicator of a bank’s financial strength and ability to absorb unexpected losses. A lower CAR suggests that the bank may not have enough capital to cover its potential losses.
Furthermore, the loan asset quality of the bank deteriorated as its non-performing loans rose from 5.01% to 8.52%.
Non-performing loans are loans that are in default or are close to being in default. A higher percentage of non-performing loans indicates that the bank is at a higher risk of incurring losses from its loan portfolio.
Overall, the financial statement of First National Bank Ghana for Q1 2023 shows a mixed picture with an increase in assets and deposits, but a decline in profitability and a significant drop in its CAR, coupled with a deterioration in its loan asset quality.
Source: norvanreports