UMB grows assets value by GHS 790m in 2022
Universal Merchant Bank (UMB) Ghana at close of the year 2022 recorded a significant growth of GHS 790m in its total assets value.
Assets value of the bank grew to GHS 4.7bn at end-December 2022 from last year’s (end-December 2021) total assets value of GHS 3.9bn.
Growth in UMB’s assets value was driven largely by increments in the bank’s cash and cash equivalents from GHS 625m in 2021 to GHS 1.1bn in 2022 and supported by increments in investment securities and loans and advances to customers.
Value of the bank’s investment securities as well as loans and advances to customers stood at GHS 1.2bn and GHS 1.1bn.
Regarding liabilities of the bank, UMB within the review period posted total liabilities of GHS 4.5bn, an increase from the previous year’s liabilities of GHS 3.4bn.
Increment in the bank’s liabilities was mainly on the account of increased deposits by customers of the bank with deposits from customers rising to GHS 3.5bn at end-December 2022 from GHS 2.9bn at end-December 2021.
The increased deposits indicate a potential increase in the bank’s future interest-income given the growth in deposits which the bank can loan-out to businesses and other individuals.
On the back of the domestic debt exchange programme executed by the Government and given UMB’s exposure to government debt securities, UMB recorded a net loss of GHS 261m which is a significant decline from the GHS 10.9m profit recorded by the bank at end-December 2021.
UMB within the review period witnessed a deterioration in its loan asset quality as its non-performing loans rose from 18.68% in 2021 to GHS 33.38% in 2022. To improve its loan asset quality, the bank would need to put in place a robust loan recovery strategy to mitigate its loan losses and recoup its non-performing loans.
Capital Adequacy Ratio (CAR) of the bank at end-December 2022 stood at negative 0.21% significantly below the BoG’s minimum CAR requirement.
The low CAR of the bank indicates that the bank needs additional funding to keep operating, but already shareholders of the bank have expressed commitment to inject the additional funding the bank needs to continue its operations.
