Shareholders of GCB Bank have unanimously endorsed the payment of a final dividend of GH¢0.5 per share for the 2021 financial year.
This endorsement was made at the indigenous lender’s 28th Annual General Meeting (AGM) held in Accra, where it was disclosed that the bank had received approval from the Bank of Ghana (BoG) to proceed with the payout, as GCB Bank had met all qualifying requirements.
Speaking on the subject at the meeting, Chairman of the Board of GCB Bank, Jude Kofi Arthur said the recommendation of GH¢0.50 – which translates to GH¢132.5 million on its 265 million outstanding shares – was a result of the bank’s growth in profitability and liquidity, which were well above the regulatory requirement.
“This reflects the Board’s ongoing confidence in the Bank’s strengths and its future prospects. Our strong and resilient balance sheet, a diversified business mix and improving profitability give us the financial strength to continue to make the right investments while also rewarding our shareholders with a steady and increasing flow of dividends,” he explained.
Mr Arthur also credited the state’s response to the pandemic as being crucial for the Bank’s performance in the fiscal year, despite the generally unfavourable socioeconomic conditions.
GCB Bank recorded a 36.2 percent growth in pre-tax profit, from GH¢610.8 million in 2020 to GH¢831.9 million in the year under review.
The bank also recorded a post-tax profit totalling 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 was anchored up 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.
Cost containment measures resulted in a growth of 11.9 percent in operating expenses compared to 26.2 percent in the prior year from GH¢1.13 billion to GH¢1.26 billion. The cost-to-income ratio improved from 58 percent in 2020 to 52.2 percent in 2021,” the Bank indicated.
The Bank closed the year with a 19.16 percent increase in assets over last year’s value to end the period at GH¢18.3 billion.
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
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.
Increased vigilance and technology
Addressing matters around the Bank’s loan disbursement and recovery processes, its Managing Director, Kofi Adomako said GCB Bank has learned from recent experience and has consequently enhanced the risk and credit assessment capabilities of its people and systems.
“We have increased the training of our people and improved our systems to ensure that we are better placed to deal with credit risk, especially at a time such as this, when rates are rising and the risk of default with it,” he said.
He added that his outfit is prioritising expanding its customer base through the use of its digital channels.
The AGM saw the renomination and ratification of the members of the Board, most notably, non-executive members, Finance and Investment Consultant and Member of Parliament for Nhyiaeso, Dr Stephen Amoah and Lawyer, Daniel K. Tweneboah Asirifi.
GCB Bank closed the first week of June trading at GH¢5.06 and with a price-to-earnings ratio of 2.17.