GCB records impressive performance

Monday, November 1, 2010



THE overall performance of the Ghana Commercial Bank (GCB) in the third quarter of the year indicated an impressive improvement over the second quarter with sustained revenue momentum and enhanced profitability.
For the nine-month period ending September, the bank recorded a Profit Before Tax (PBT) of GH¢53 million as against GH¢50 million the same period last year, representing an increase of six per cent.
Income for the period to September 2010 was GH¢251.4 million, compared to GH¢169.9 million for the same period last year which represented a growth of 48 per cent; a situation the bank said was the result of improved balance sheet management and optimising risk return trade-offs.
At its third quarter 2010 interim results briefing and institutional investors meeting held at the bank’s headquarters in Accra on Friday, the Managing Director (MD) of the GCB, Mr Simeon Donoo, said the bank was progressing.
Presenting highlights of the bank’s performance, Mr Donoo said “income is resilient, impairment charges are in line with expectations, there is slow down in cost run rate as well as improved balance sheet and capital management”.
He reiterated that the bank’s expectation of an improved overall performance was unchanged, adding “We expect the interest rate easing cycle to continue, albeit at a slower pace as efforts are made to stimulate the economy”.
Mr Donoo indicated that business volume growth was expected to be strongest in the last quarter of the year. Revenue, however, was forecast to grow at a relatively slower pace due to the expectations of a decrease in operating margins in line with the general reduction in money market rates and as a result of short-term shifts in the portfolio.
A statement presented to journalists at the programme indicated that operating costs of GH¢126.5 million for the nine months were 20 per cent higher that the GH¢ 105.6 million for what was recorded for the same period a year ago.
“These cost are impacted by one-off costs relating to prior years. Despite this increase in costs the bank recorded an improvement in its operating efficiency with a cost income ration of 50 per cent compared to 62 per cent for the same period last year”, it stated.
It said impairments were in line with expectations, held relatively flat during the quarter, adding that it resulted in an annualised impairment charge of nine per cent versus 14 per cent in June 2010.
“It reflects the increased focus on improving the quality of the loan book. Total impairment charge for the nine months was GH¢71.9 million as against GH¢9.9 million during the third quarter of 2009”, the statement pointed out.
According to the statement, the GCB’s total assets increased by four per cent to GH¢1.99 billion as against GH¢1.92 billion in December 2009, driven by a 12 per cent growth in customer deposits to GH¢1.41 billion compared to GH¢1.26 billion in December 2009.
The growth was said to have come from current and savings account products which increased by 13 per cent over the period.