GCB’s NPL nearly triples in 1 year
Asset quality of State-owned bank, GCB, recorded significant deterioration as its non-performing loans (NPL) on a year-on-year basis (June 2020 to June 2021) nearly tripled.
Per information contained in the bank’s Unaudited Financial Statement for Q2 2021, the bank’s NPL as of June 2020, accounted for 7.8 percent of total loans made, the bank’s NPL however, shot up to 20.7 percent of total loans made as at the end-June 2021.
Factors that have accounted for the astronomical increase in the bank’s NPL are currently unknown, but one can always partially attribute the surge in the bank’s NPL to loan repayment challenges faced by businesses and households as a result of the negative impact of the Covid pandemic on the economy.
Additionally, the provision of a 3-12 months moratorium on principal payments on loans granted to businesses and households by the bank per the directive issued by the Central Bank might also be a factor.
With regards to the banks Capital Adequacy Ratio (CAR), GCB for the first half of 2021, posted a CAR of 20.9 percent which is well above the regulatory 13 percent CAR demanded by the Central Bank.
With a CAR of 20.9 percent, this means that the bank has enough capital to absorb potential losses incurred due to bad loans.
Read: Total investment interests in Nigeria crashed by 80% between Q1 and Q2
It also means that the bank is highly unlikely to become insolvent and very capable of protecting depositors’ monies.
GCB, for the review period, posted a profit of Ghs 227 million, some Ghs 45 million more profit when compared to last year’s Ghs 182 million.
The bank’s profit was driven largely by its net interest and operating incomes.
Net interest income and operating income amounted to Ghs 915 million from Ghs 670 million and Ghs 1.1 billion from Ghs 906 million respectively for the review period.
In terms of total assets, the bank grew from Ghs 14.1 billion in June 2020 to Ghs 16.4 billion in June 2021 – by more than Ghs 2.3 billion.
As expected, the recorded increment in the bank’s assets was driven mainly by an increase in the bank’s investment holdings of government securities.
The value of the bank’s investment securities as of June 2020, stood at Ghs 6.8 billion. But as of end-June 2021, it had increased to Ghs 8.9 billion.
Total liabilities for the period under review also increased significantly from Ghs 12.3 billion to Ghs 14.2 billion driven largely by deposits from the bank’s customers.
Peruse financial statement below:
Gcb by Fuaad Dodoo on Scribd
