GCB NPLs above industry average at end-Q3 2022
Non-performing loans (NPLs) of state-owned bank, GCB Limited, at the end of the third quarter of 2022 was 15.7%, slightly above the industry’s average NPLs of 14%.
Despite having NPLs slightly above the industry’s average, the bank’s end-Q3 2022 NPLs is an improvement when compared to the 20.5% gross NPLs recorded at end-Q3 2021.
The decline in GCB’s NPLs indicates improved efficiency in the loan recovery strategies of the bank. That notwithstanding, GCB will still have to further increase the efficiency of its loan recovery strategies is it is to drive down its NPLs below the industry average.
Capital Adequacy Ratio (CAR) of the bank for the review period, declined by 2.2% percentage points from 19.9% in Q3 2021 to 17.7% in Q3 2022.
The capital adequacy ratio (CAR) is a measurement of a bank’s available capital expressed as a percentage of a bank’s risk-weighted assets and liabilities.
Capital Adequacy Ratios mandate that a certain amount of the deposits be kept aside whenever a loan is being made. These deposits are kept aside as provisions to cover up the losses in case the loan goes bad.
Despite the marginal decline in CAR, GCB is more than capable of making provisions to cover potential losses incurred due to bad loans and protect depositors’ funds.
Total assets value of the bank within the review period surged to GHS 20.8bn in Q3 2022 from the previous year’s total assets value of GHS 17.1bn.
Increment in the bank’s total assets value were occasioned by growth in GCB’s cash and cash equivalents and loans and advances to customers.
The aforementioned components of the bank’s total assets value grew to GHS 4.1bn from GHS 2.1bn and GHS 5.6bn from GHS 3.7bn in Q3 2022 and Q3 2021 respectively.
The value of investment securities however declined from GHS 9.4bn to GHS 8.8bn in Q3 2021 and Q3 2022.
Liabilities, driven mainly by deposits from customers, grew to GHS 18bn from GHS 14.8bn within the review period. Deposits from customers amounted to GHS 15.8bn at end-Q3 2022.
Profit recorded by GCB at end-Q3 2022, stood at GHS 443m as against the GHS 338m profit recorded in Q3 2021.
