UT Bank improves loan advances

UT Bank recorded profit before tax of GH¢26.7 million, representing 54.4 percent growth year-on-year, while it also grew loan advances in excess of GH¢480 million for the 2012 financial year.

Total assets grew by 38.5 percent from GH¢713 million in 2011 to GH¢987 million in December 2012.This was mainly on account of a sharp increase in net loans and advances by 43.1 percent from GH¢475 million to GH¢680 million.

Speaking at the bank’s annual general meeting in Accra yesterday, Kofi Amoabeng, CEO of UT Bank said the increase in loans and advances were made possible because of the increased liquidity resulting from the additional equity and term debt raised from the IFC, ACF and DEG. Commenting on other aspects of the company’s performance, Mr Amoabeng stated that customer deposits grew significantly by 46.2 percent from GH¢546 million in 2011 to GH¢798 million.

“Our income grew by 32.6 percent from 2011 pushing our total income to GH¢105 million. A significant portion of this success can be attributed to our funded and non-funded incomes. Admittedly, our cost of funds suffered as a result of the steep increase in government T-Bill rates during the second quarter of 2012. Meanwhile, the increase in our lending rate did not match the movement in funding costs therefore our net interest margin for the year was lower at 9.0 percent compared to 10.5 percent in 2011," he said.

UT, which strengthened its capital base, recorded increases in non-funded income by 47.4 percent from GH¢29 million to GH¢43 million. This stemmed from the momentous growth in transactional businesses. “The additional trade support line of $70 million enabled the bank to grant more letters of credit and guarantees. This further supported growth in our other foreign transactions.”

Shareholders’ funds increased by 109.8 percent from GH¢61 million to GH¢128 million in 2012. The extra capital injection did put pressure on return on equity, which dropped from 21.3 percent in 2011 to 16.3 percent.

“The year 2012 was an eventful year for us. Being named Bank of the Year at the Corporative Initiative Ghana (CIG) Banking Awards was one of our most outstanding achievements in the year. This is even more remarkable due to the fact that UT Bank has only been in existence for three years.”

Joseph Nsonamoah, Board Chairman of UT Bank, in a statement, said UT successfully completed its private placement in July 2012 raising approximately GH¢46 million from equity injection to push its total equity to GH¢85 million.