OmniBSIC Bank Ghana Limited ended the first quarter (1Q) of 2023 on a positive note, with a stellar performance that defies challenges facing the local banking sector.
The bank’s strong performance resulted in profit before tax growing by 500 percent to GH¢52.12million in the first three months of 2023. This was achieved through a concerted effort by the bank to improve operational efficiency, funded income and asset quality.
OmniBSIC Bank’s results showed that profit before tax was GH¢8.69million in the same quarter of 2022, but surged to GH¢52.12-million for last-quarter on the back of strong growth in all revenue lines.
Its financial performance, which was published last week, showed that OmniBSIC also remained liquid and well-capitalised. The bank’s liquidity ratio stood at 91.4 percent, indicating a liquid and resilient bank.
The capital adequacy ratio (CAR) was also 23.5 percent, reflecting a well-capitalized bank at a time when the economic crisis has eroded the capitals of most banks.
Drivers of profit
OmniBSIC grew its interest income by 204 percent within the period. It rose from GH¢58.02million in the first quarter of 2022 to GH¢176.28million in the same quarter this year.
The bank’s non-funded income also grew, by about 98 percent from GH¢17million to GH¢34million as the result of a rapid increase in commission and fees and trading income.
Strong balance sheet
In addition to the strong showing in its financial soundness indicators, OmniBSIC also posted significant growth in its earning assets. Investments more than doubled from GH¢1.17billion in the first quarter of 2022 to GH¢2.89billion in the quarter under review.
The bank grew its loans and advances by 37.4 percent to GH¢618.13million in the first quarter of this year. Loans and advances were GH¢449.87million in the same period last year, but increased on the back of more support extended to businesses and the economy in the first quarter of this year.
While deposits from customers also more than doubled from GH¢1.78billion in the first quarter of last year to GH¢3.53billion in the same quarter this year, deposits with banks and other financial institutions rose from about GH¢84.66million to GH¢242.97million within the same period.
The bank’s shareholders funds as at March 31, 2023 stood at GH¢417million (above the regulatory minimum of GH¢400million) – a growth of 10 percent from the same period last year, despite the negative impact of Ghana’s Domestic Debt Exchange Programme.
Return on equity (ROE) also ended the quarter at an impressive 50 percent, while return on assets (ROA) was 5 percent in the period under review.
Implications
The Managing Director (MD) of OmniBSIC, Daniel Asiedu, said the results indicate that the bank generally improved its financial soundness indicators over the period in terms of asset quality, liquidity and capital adequacy ratio.
Mr. Asiedu said the balance sheet remained strong because of the buoyant growth in investments and increased support to businesses and the economy through loans and advances.
Banking application
A wholly-indigenous bank, OmniBSIC was launched in 2019 as the outcome of a merger between two strong brands meant to consolidate their operations and serve customers better.
It faced turbulence in its first years until late 2021, when the ingenuity of the current board, management and staff started paying off.
The MD said the bank is not resting on its laurels but pushing further with innovations and products to help meet the growing needs of customers.
The astute banker, who is also a Reverend Minister and Chairman of the International Presbytery of Fountain Gate Chapel (FGC), said the bank recently upgraded its banking software to the latest version of FLEXCUBE – a universal banking software used by the world’s big lenders – to ensure efficient service delivery.
The former MD of Zenith Bank Ghana and the Agricultural Development Bank said the upgrade had made OmniBSIC’s operations smoother, noting that further major milestones should be expected in the coming financial year.
