GCB Bank extended 19.21 percent more in loans and advances to customers in 2021, with its loan book closing the year at GH¢4.3 billion, its statement of results for the period has shown.
The bank also recorded a post-tax profit totaling GH¢557 million for full-year 2021, a 26.7 percent growth from the GH¢439 million recorded in the previous fiscal period and marginally beating analysts’ expectations.
This hinged on operating income growth to GH¢2.3 billion, up from GH¢1.9 billion in 2020 and was propelled largely by Net Interest Income, which appreciated by 25.7 percent to end the fiscal year at GH¢1.88 billion.
It remains on course to reach GH¢20 billion in assets in the current fiscal year, with its audited financial results for full-year 2021 showing a 19.16 percent increase over last year’s value to close the period at GH¢18.3 billion.
The growth, according to the statement, was driven largely by an appreciation in Cash and Cash Equivalents (46.84 percent); Non-pledged trading assets (115.8 percent); Loans and Advances (19.21 percent) as well as Deferred Tax (51.11 percent), on a year-on-year (YoY) basis.
Asset quality recorded a mixed bag as the bank’s non-performing loans saw almost double on a YoY basis, rising from 8.71 in 2020 to 15.98 percent in the period under review. The year-end figure, however, was an improvement on the 20.50 percent recorded at the end of quarter-three of 2021.
GCB Bank’s capital adequacy ratio (CAR) recorded a minimal uptick, up 0.2 percent to end the year at 20.9 percent, well above the minimum regulatory requirement of 11.5 percent and in tandem with the industry average. Other indicators including its leverage and liquidity ratio remained flat at 11 percent and 64 percent respectively.
In its notes to investors, Databank commended GCB Bank, particularly for the growth in its loan book over the period.
“The double-digit loan book growth on quarter-on-quarter and year-on-year is commendable and affirms management’s commitments to grow the loan book over the medium term. According to management, the bank has increased focus on expanding its low-risk retail loan portfolio along with the low-risk self-liquidating corporate loan.
Although the bank’s asset quality remains a key concern, we were pleased to see a significant decline in the NPL ratio. The bank expects its asset quality to improve further, as it has fully provisioned for its two most challenged loan facilities in the first half of 2021,” Databank stated.
On account of GCB Bank’s performance and modest economic recovery, the asset manager forecasted further growth in GCB’s loan books.
“Additionally, while provisioning costs exceeded our expectations, we were impressed with the significant year-on-year decline and expect to see further moderation in impairment charges in the subsequent quarters. We expect the bank’s solid fundamentals and ongoing economic recovery to support loan book growth to drive profitability.”