GCB’s profit skyrocketed by more than 28% margin

GCB Bank PLC, one of the leading indigenous banks in the Ghanaian banking space recorded an impressive performance in the just ended financial year.

According to the financial report, GCB Bank PLC posted an overall strong performance in the year 2021, as seen in its impressive growth in profits- both before tax and after tax, as well as the increase in the loans and advances given to the bank’s customers in the just ended financial year as compared to the situation in previous year, 2020.

GCB Bank saw its profit before income tax grow by a massive 35.5 per cent in 2021. In clear terms, profit before income tax grew from about GH¢ 601.9 million in 2020 to GH¢809.8 million last year. Meanwhile, GCB Bank grew by just about 7 per cent in 2020 when compared to its performance in 2019.

Moreover, a cursory look at the banks statement of profit or loss showed that the growth can be traced to the strong improvement in the banks funded income, that is, its net interest income, and the bank’s non-funded income- net fee and commission income, both grew in 2021 by about 25.7% and 28.7% respectively.

The report further indicated that GCB Bank’s profit for the year after deductions of income tax expenses, stood at GH¢ 556.7 million in 2021. This represents a growth of about 27 per cent.

Upsurge in Total Assets 

The total assets of GCB Bank, as revealed by the financial statement of the bank showed a whooping increase compared to the previous years. The bank’s statement of financial position for the 2021 financial year indicated that total asset value of about GH¢15.3 billion in 2020 grew to GH¢18.2 billion in 2021, representing a growth of about 19 per cent.

One notable area that the bank did so well was the loans and advances. Even during the period of the pandemic, the bank’s loans and advances to customers’ portfolio grew by about 19 per cent in 2021. However, the growth in the bank’s investment securities slowed down in 2021, growing by just 13.2 per cent compared to the 43 per cent growth witnessed in the previous year, 2020.

Capital Adequacy Ratio

GCB Bank’s ability to handle losses as depicted by its Capital Adequacy Ratio of 20.9 per cent, is strong and well above the banking industry’s average of 19.6 per cent as at the first quarter of 2022, and also well above the current revised regulatory minimum of 13 per cent.

That notwithstanding, one particular area that GCB Bank did not do well is the non-performing loans. The non-performing loan ratio which measures the rate at which loans are defaulted, witnessed some deterioration in the 2021 financial year. The non-performing loan ratio performed badly as it went from 8.71 per cent in 2020 to 15.98 per cent in 2021, a development that needs to be checked.