Société Générale spared brunt of DDEP, says MD


…as focus on real sector, financial intermediation bears fruit

Financial services provider Société Générale says it emerged relatively unscathed from the recent Domestic Debt Exchange Programme (DDEP), due to a strategic emphasis on its primary duty of financial intermediation.

Its Managing Director, Ouzzani Hakim, speaking when the financial services provider took its turn at a Facts Behind the Figures session hosted by the Ghana Stock Exchange (GSE) in Accra, stated that by deliberately focusing on providing loans to individuals and businesses rather than investing heavily in long-term Treasury securities, the bank ensured that it maintained a diversified portfolio and minimised its exposure to potential risks associated with long-term bonds – with a total of GH¢33million exchanged under the programme.

“Ggovernment is a major partner of the bank; however, we have implemented strategies to maintain a balanced portfolio not only in terms of sovereign exposure but overall. We avoid concentration by diversifying our loans, and a portion of our exposure is focused on short-term investments,” he said.

“Our exposure during the exchange was limited to GH¢33million because our primary focus is not on buying bonds directly, but rather on providing loans to individuals and businesses. Whenever we have excess liquidity, we look to what areas we can put it in with the right level of risk,” SG Bank’s MD added.

This has seen the bank swim against the tide by growing its loan-to-deposit ratio to 73 percent; almost double the industry average. In the period under consideration, loans to retail and corporate customers soared to GH¢3.1billion from GH¢2.5billion at the close of 2021. This helped propel total assets to GH¢6.59billion versus GH¢5.44billion.

Total liabilities also rose by 25 percent, driven primarily by growth in deposits to GH¢4.24billion. Operating income hit GH¢801.5million on account of growth in interest, fees and commission incomes.

Despite posting GH¢168.4million in profit before tax, post-tax profit fell to GH¢108.8million; a 41 percent drop from GH¢184.3million recorded in 2021 as the exchange programme took its toll – with its capital adequacy ratio remaining above the regulatory floor at 16 percent during the period under consideration.


Mr. Hakim said his outfit will maintain its strategy of supporting the real sector, especially small and medium-sized enterprises (SMEs).  He disclosed that SG Bank currently has strategic partnerships with about 18 specialised entities – in the domains of technology, accounting, HR, legal and tax; and that collective efforts are dedicated to fostering the growth of SMEs across the entire nation.

“We firmly believe that many of these nascent startups will transform into influential enterprises of the future. Our unwavering conviction lies in the understanding that consistent support is the key driver of development,” he said.

He added that one of the bank’s primary objectives is to maintain a loan-to-deposit ratio within the range of 80 to 90 percent, saying it considers the metric to be a vital benchmark as it reflects the bank’s commitment to fulfilling its responsibilities.

The bank’s head was optimistic that the performance and strategy in this area over the last half-decade will prove crucial. Since 2017, SG Bank grew its deposits from GH¢1.99billion to the GH¢4.24billion recorded at the end of 2022. Similarly, loans and advances over the period shot up from GH¢1.41billion to GH¢3.1billion.

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