Societe-General loan asset quality shows deterioration in 2023; net profit grows to GHS 424m

Loan asset quality of Societe General Bank measured by its non-performing loan ratio (NPL) worsened in 2023.

NPL of Societe General grew by six percentage points (6%) to 19.55% at end-2023 from the previous year’s NPL ratio of 13.48%.

Despite the growth in the bank’s NPL, it remains well below the industry’s average NPL ratio of 24.6%.

The year-on-year increase in NPL indicates a weakening in the loan recovery methods of the bank.

Loans and advances made by the bank to customers at end-2023 stood at GHS 3.9bn, a slight expansion from the GHS 3.1bn loans made in 2022.

Despite the increase in bad debts (non-performing loans), Societe General recorded significant growth in its net profit.

Societe General grew its net profit by more than GHS 316m ending 2023 with net profit of GHS 424m from the 2022 figure of GHS 108m.

Mainly accounting for the surge in net profit was interest income which amounted to a little over GHS 1bn from GHS 659m in 2022.

Assets value of the bank within the review period grew by GHS 2bn from GHS 6.5bn in 2022 to GHS 8.5bn in 2023.

Contributing to the growth in assets value of the bank were cash and cash equivalents (GHS 2.1bn), loans and advances to customers (GHS 3.9bn), and debt instruments (GHS 1.8bn).

Liabilities of the bank driven by customer deposits (GHS 5.08bn) amounted to GHS 7bn at end-2023 from GHS 5.5bn at end-2022.

Capital Adequacy Ratio (CAR) of the bank within the review period increased to 18.71% from 16%, indicating the strengthening of the solvency of the bank.

The bank’s CAR remains well above the industry’s average CAR of 13.6%.

Source:norvanreports