SG-SSB battles loan recovery

Though SG-SSB’s revenue in the third quarter of 2012 shot up by 24 percent to GHS110.4 million on the back of an impressive growth in non-interest income by 132 percent, its loan default increased by a whopping 110 percent to GHS3.05 million, casting a dim outlook on loan recovery for the bank.

The bank’s net interest income increased by a marginal 6.1 percent, accruing from interest income and expense, which stood at GHS65.4 million and GHS11.6 million respectively.

Its net profit significantly improved with a 48.1 percent growth over same period 2011.

Deposits grew by 34 percent accompanied by a 51 percent increase in loans and advances.

Frontline Capital Advisors, stock analysts, which revealed the foregoing in their recent analysis from the nine-month synopsis of the bank, said SG-SSB has the potential for expansion since the bank has not tapped deeply into the remote retail market in Ghana.

“The bank could also leverage the strong presence of its parent company, Société Générale Group, in West Africa.”

Operating income recorded GH¢124,093,000 while operating expenses stood at GH¢80,661,000. Profit-before-tax was GH¢40,226,000 while profit-after-tax was GH¢30,170,000.

“We downgrade our recommendation of SG-SSB to REDUCE based on a 12-month fair value price target of GHS0.71, which represents a capital gain of 0.8 percent in local currency terms. SG-SSB has witnessed a positive rally on the stock market, which has translated into a year-to-date price appreciation of 45.8 percent. As the stock approaches its 5-year high, further gains can only be propelled by a catalyst to break through the resistance,” the stock analysts stated.

SG-SSB Limited (SG-SSB) was incorporated in 1977 as Social Security Bank to engage in the business of banking. SG-SSB provides commercial banking services to retail, corporate and small and medium scale enterprises.

The bank has 45 fully networked branches, agencies and outlets. SG-SSB operates as a subsidiary of Société Générale Group.