GCB Bank posts GH¢700 million in H1 profit

One of Ghana's largest banks GCB Bank has posted a strong profit growth in the first half of 2024 (1H 2024) compared to the same period in 2023.

This strong performance, according to the bank's half year 2024 financial results, was primarily driven by a significant increase in customer deposits year-to-date (YTD), coupled with dedicated efforts at optimizing operational efficiency.

The results showed a strategic shift to a strong focus on sales, transaction banking and a customer-centric approach.

Profit Before Tax for the period increased by 35 percent year-on-year (y/y) to GH¢700.3 million, driven by growth in interest income and supported by a 21 percent year-to-date increase in customer deposits and an increase in net fees and commission income.

"Total revenue increased by 5 percent y/y to GH¢1.89 billion at 1H 2024. Net interest income grew by 5 percent y/y to GH¢1.43 billion in 2024, with net fees and commission income also increasing by 28 percent to GH¢245.4 million," the Bank's report showed.

"Increased earnings from electronic services, trade services, processing and facility fees drove the net fees and commission growth over the half-year period. Additionally, net trading income contributed GH¢211.8 million to revenue in 1H, 2024," it added.

The state-owned bank's operating expenses for 1H 2024 came in at GH¢1.08 billion, up 17 percent from GH¢921.1 million in 2023. This increase was driven by inflation and currency depreciation pressures.

However, impairment loss on financial assets for the period declined by 70 percent y/y to GH¢104.8 million in 1H 2024. This sharp decline in impairment loss resulted from the Bank's enhanced risk management and risk mitigation strategies.

The balance sheet also grew substantially in the review period as total assets surged to GH¢33.20 billion, representing a 22 percent increase YTD. A significant deposit growth, which reflects clients' unwavering confidence in the Banks' resilience amidst the prevailing macroeconomic uncertainties, underscored the increase in the balance sheet size.

Meanwhile, Shareholders' Equity surged by 15 percent YTD to GH¢3.22 billion in 1H 2024 due to the increased profit for the period, bolstering the Bank's financial performance and increasing shareholders' value. This growth in equity underscores a strong financial footing and demonstrates the Bank's capacity to generate internal capital.

Earnings per share also grew, rising from GH¢2.52 in 1H 2023 to GH¢3.20 in 1H 2024. Also, the Capital Adequacy Ratio stood at 18.5 percent, well exceeding the regulatory requirement of 10 percent. Return on Equity reached 26.2 percent, reflecting efficient capital utilization, while Return on Assets settled at 2.8 percent.

John Kofi Adomakoh, Managing Director of GCB Bank PLC, speaking on the 1H 2024 performance said, "GCB continues to record strong and higher quality earnings as well as improved returns to shareholders despite the challenges and uncertainties in the market combined with intensifying competition".

Mr. Adomakoh explained that a strong focus on sales and transaction banking, growth in the Bank's client base and growing relationships, stringent credit underwriting standards coupled with cost-effectiveness, strong governance, and effective risk management and control drove the 1H 2024 performance.

Touching on the intended capital raise, Mr. Adomakoh mentioned that the Bank decided to put the capital raise on hold on the back of strong financial performance in 2023.

He also highlighted the Bank’s commitment to continue to rebuild capital through future profits while assessing capital requirements on an ongoing basis amidst heightened uncertainties in the operating environment and regulatory developments.

The GCB Managing Director shared management's commitment to maintaining optimal capital levels to support strategic and business objectives to drive long-term success and returns for shareholders.

The Bank's 1H 2024 results indicates it remains a beacon of financial stability and resilience, well-prepared to navigate the intricate financial landscape in Ghana with steadfastness, confidence and strategic foresight.

MA/AE

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