GCB MD Outlines Strategy to Tackle Bank’s Elevated NPLs
GCB Bank Plc’s Managing Director, Kofi Adomakoh, has acknowledged that non-performing loans (NPLs) remain a concern for the bank, despite a slight reduction over the past year.
Speaking to journalists at the Ghana Stock Exchange’s (GSE) “Facts Behind The Figures” event on Monday, Mr Adomakoh attributed the bank’s elevated NPLs—standing at 19.9% as of the first half of 2024, compared to 20.2% in the previous year—to the prevailing high-interest rate environment, which has placed significant pressure on borrowers’ repayment capacity.
The bank’s NPLs remain slightly below the broader banking sector’s NPL average of 24.1%.
To address the bank’s NPLs, Mr Adomakoh noted that GCB Bank intends to implement more stringent underwriting standards and engage with its customers to better structure financing arrangements.
Additionally, the bank is exploring alternative funding mechanisms aimed at reducing its reliance on high-interest loans, which have exacerbated the strain on borrowers.
Despite challenges with NPLs, increased operating expenses occasioned by inflation and currency depreciation pressures, among others, GCB Bank reported robust profit growth for the first half of 2024.
Profit before tax surged by 35% year-on-year to GHS 700.3 million, driven by a notable 21% increase in customer deposits and a 28% rise in net fees and commission income, which reached GHS 245.4 million.
Total revenue for the period also increased by 5% year-on-year to GHS 1.89 billion.
Speaking further to journalists at the event, Mr Adomakoh highlighted the bank’s improved capital adequacy, positioning GCB to undertake larger transactions and support its long-term growth strategy.
According to the MD, the bank’s focus remains on expanding its customer base, advancing its digital transformation, and enhancing the overall customer experience.
While GCB has paused plans to raise additional capital, Mr Adomakoh indicated that the bank would review this decision at year-end, with a view to restoring the institution to its pre-debt exchange programme strength.
