GCB posts GHS 3.1bn increase despite GHS 555m loss in 2022
Despite the profit loss, GCB’s increase in assets value is largely attributed to its growth in cash and cash equivalents from GHS 2.3bn in 2021 to GHS 4.4bn in 2022. Additionally, an increment in loans and advances to customers from GHS 4.3bn to GHS 5.4bn further supported the bank’s asset growth trajectory. Nonetheless, income from investment securities declined by GHS 1.1bn from GHS 9.7bn to GHS 8.6bn within the review period.
Ghana’s largest bank by assets, GCB, recorded an impressive GHS 3.1bn increase in assets value in 2022. This growth is notable given the backdrop of a GHS 555m loss in the year under review, caused by the government’s domestic debt exchange programme.
Despite the profit loss, GCB’s increase in assets value is largely attributed to its growth in cash and cash equivalents from GHS 2.3bn in 2021 to GHS 4.4bn in 2022. Additionally, an increment in loans and advances to customers from GHS 4.3bn to GHS 5.4bn further supported the bank’s asset growth trajectory. Nonetheless, income from investment securities declined by GHS 1.1bn from GHS 9.7bn to GHS 8.6bn within the review period.
The increase in GCB’s liabilities from GHS 15.7bn to GHS 19.5bn, driven mainly by deposits from customers which rose from GHS 13.1bn to GHS 17.5bn, is indicative of the bank’s solid customer base. However, the non-performing loans of GCB deteriorated from 15.98% to 20.59% in 2021 and 2022, respectively, as a result of the domestic debt exchange program. The capital adequacy ratio of the bank also witnessed a decline from 20.9% in 2021 to 17.86% in 2022.
The increase in assets value despite the profit loss is a positive indication for the long-term prospects of the bank. The growth in loans and advances to customers suggests that the bank has been successful in attracting and retaining customers in a challenging economic climate. The growth in deposits from customers also demonstrates the confidence placed in the bank by its clients.
However, the increase in non-performing loans and the decline in capital adequacy ratio raise concerns over the bank’s asset quality and financial stability. The bank will need to keep a closer watch on its credit risk management practices, particularly as the challenging macroeconomic environment persists.
Furthermore, the decline in income from investment securities reflects the bank’s exposure to risk, especially in the context of Ghana’s volatile economic environment. As such, the bank will need to diversify its sources of income to mitigate any potential losses in the future.
Source: norvanreports.com
