GCB Bank recorded significant growth in all key performance indicators during the first quarter of 2021, compared to the same period in 2020. Strong growth in customer deposits, revenue and increased focus on optimization of operating expenses were the key drivers of the performance.
Profit for the period (before tax) amounted to GHS 181.39m, up 46.9% compared to GHS123.49m in the same period 2020. The main driver of this performance was growth in revenue underpinned by robust balance sheet growth.
Total income increased from GHS 427.01m in Q1, 2020 to GHS 570.11m of Q1, 2021, representing 33.5%. Net interest income rose from GHS 334.24m in Q1, 2020 to GHS 446.65m in Q1, 2021 posting an increase of 33.6% while net fees and commission income increased by 22.4% to GHS 78.59m in Q1, 2021. The increase in net fees and commission was anchored on growth in earnings from e-services, trade services, processing and facility fees, among others. Net trading income contributed GHS 41.39m to revenue in Q1, 2021, up 52.7 percent from GHS 27.11m.
Operating expense amounted to GHS 308.72m in Q1, 2021 compared to GHS 289.92m incurred in Q1, 2020. This showed an increase of 6.5%.
The profit trajectory was impeded by significant growth in impairment charge for the period. Impairment loss on financial assets was GHS 80m in Q1, 2021 compared to GHS 15.25m in the same period last year, representing 524.6 % increase. Credit deterioration of some key customers operating in the hospitality and educational sectors of the economy accounted for the jump in impairment loss.
The balance sheet grew from GHS12.81b to GHS16.39b during the period under review. This represents a rise of 27.9%. The growth was attributable to increase in deposits by 32.7% YoY (from GHS 9.88b in Q1, 2020 to GHS 13.11b in Q1, 2021). The growth in deposit drove significant increase in investment securities from GHS 5.98b to GHS 8.71b in the first quarter of 2021. This reflects 45.65% increment.
Shareholders’ funds increased from GHS 1.89b (Q1, 2020) to GHS 2.32b in Q1, 2021. This represents a jump of 22.8%. The growth has strengthened the Bank’s level of solvency.
The above performance resulted in improvement in Cost–income ratio from 58% in Q1, 2020 to 55% in Q1, 2021. Earnings per share (EPS) also improved from GHS1.41 to GHS 2.06 in Q1, 2021, and capital adequacy ratio (CAR) settled at 19.7%. Return on Equity (ROE) rose to 25.0% in Q1, 2021 from 22.1% recorded in the same period last year.