Republic Bank records 32.6% surge in assets value but profitability dips to GHS 44.6m
Republic Bank Ghana recorded a 32.6 percentage points surge in its assets value year-on-year to GHS 7.83bn at the close of the first quarter of 2024.
The bank’s assets value at the close of the first quarter of 2023, stood at GHS 5.91bn.
Driving the growth in the bank’s assets value were elements such as cash and cash equivalents (GHS 3.40bn), investment securities (GHS 1.13bn) as well as loans and advances to customers (GHS 2.43bn).
Liabilities of the bank within the review period grew to GHS 7bn from GHS 5.2bn same period last year.
Accounting for the growth in Republic Bank’s liabilities is deposits from customers of the bank which amounted to GHS 5.7bn in Q1 2024 from GHS 4.5bn in Q1 2023.
Total equity attributable to equity holders of the bank within the review period rose to GHS 836,608 in Q1 2024 from GHS 708,756 in Q1 2023.
Shareholders’ equity is the amount that the owners of a company have invested in the business. This includes the money they have directly invested and the accumulation of income the company has earned and that has been reinvested since inception.
Profitability of the bank witnessed a decline at end-Q1 2024 settling at GHS 44.6m from GHS 47.2m same period last year.
Increased interest expense, increased fee and commission expense, net impairment on financial assets, and personnel expenses were the main contributory factors to the decline in the bank’s net profit for the review period.
Loan asset quality of the bank also witnessed marginal deterioration with the bank’s non-performing loan (NPL) ratio rising from 18.94% to 19.30%.
Despite the increase in the bank’s NPL ratio, Republic Bank’s NPL is fairly above the industry’s average NPL ratio of 24%.
The bank needs to strengthen its credit risk management system to reduce its NPL.
Capital Adequacy Ratio (CAR) of the bank at end-Q1 2024 also declined to 17.45% from 19.23% in Q1 2023.
Despite the decline in CAR, the bank’s CAR remains fairly above the BoG’s minimum CAR regulatory requirement of 13%.
