BankingBusiness

GCB records significant growth in first quarter of 2021

The bank’s main driver of this performance was growth in revenue underpinned by robust balance sheet growth

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 GHC181.39 million, up 46.9% compared to GHC123.49m 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 GHC427.01 million in the first quarter, 2020 to GHC570.11 million in the first quarter, 2021, representing 33.5%. Net interest income rose from GHC 334.24 million in the first quarter, 2020 to GHC446.65 million in the first quarter, 2021 posting an increase of 33.6% while net fees and commission income increased by 22.4% to GHS 78.59 million in the first quarter, 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 GHC41.39 million to revenue in Q1, 2021, up 52.7% from GHC27.11 million.

Operating expense amounted to GHC308.72 million in the first quarter, 2021 compared to GHC289.92 million incurred in the first quarter, 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 GHC80 million in the first quarter of 2021 compared to GHC 15.25 million in the same period last year, representing a 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 GHC12.81 billion to GHC16.39 billion during the period under review. This represents a rise of 27.9%.

The growth was attributable to an increase in deposits by 32.7% year-on-year (from GHC 9.88 billion in the first quarter, 2020 to GHC13.11 billion in the first quarter, 2021).

The growth in deposit drove a significant increase in investment securities from GHC5.98 billion to GHC8.71 billion in the first quarter of 2021. This reflects a 45.65% increment.

Shareholders’ funds increased from GHC1.89 billion (Q1, 2020) to GHC2.32 billion in Q1, 2021. This represents a jump of 22.8%. The growth has strengthened the Bank’s level of solvency.

The performance resulted in an improvement in the cost-income ratio from 58% in the first quarter, 2020 to 55% in the first quarter, 2021.

Earnings per share (EPS) also improved from GHC1.41 to GHC2.06 in the first quarter, 2021, and capital adequacy ratio (CAR) settled at 19.7%. Return on Equity (ROE) rose to 25.0% in the quarter, 2021 from 22.1% recorded in the same period last year.

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Source
thebftonline.com
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