GCB: Assets value increase by Ghs 2.29bn YoY but NPLs more than double
Assets value of State-owned bank GCB, grew by Ghs 2.29 billion year-on-year reaching Ghs 17.16 billion at the end of the third quarter of 2021.
Compared to same period last year, the bank’s total assets value was Ghs 15.87 billion.
An examination of the bank’s Financial Statement for the third quarter of 2021 reveals that the surge in assets value was primarily due to increment in the holding of investment securities by the bank which is mainly made up of short term debts such as the 91, 182 and 364 days treasury bills issued by the government.
The bank’s holdings of investment securities for the period under review increased by almost Ghs 2 billion from Ghs 7.65 billion in Q3 2020 to Ghs 9.47 billion in Q3 2021.
The increment in GCB’s investment securities reaffirms the assertion by the Bank of Ghana (BoG) that banks in the country have increased their holdings of government debts to more than Ghs 80.3 billion as at the end of August this year due to the fact that banks find it less risky to lend to government than the private sector.
Meanwhile, GCB’s liabilities grew from Ghs 12.99 billion to Ghs 14.84 billion, increment in liabilities was mainly attributed to tax liabilities, borrowings, deposits from other banks and customers.
For deposits from other banks and customers, the bank saw deposits grow from Ghs 561 million to Ghs 652 million and Ghs 11.43 billion to Ghs 12.81 billion respectively.
In terms of profit, net profit made for the review period was Ghs 338 million, an increase of Ghs 59 million from the Ghs 278 million recorded same period last year.
The recorded profit translates into a dividend of Ghs 1.70 pesewas subject to the approval of the Board of Directors of the bank.
Despite the positive growth in GCB’s assets value and profit, the bank’s Non-Performing Loans (NPLs) increased weakening its loan asset quality.
The bank’s NPL on a year on year basis increased by 11.2 percentage points. NPLs recorded for Q3 2021 was 20.5 percent as against the 9.3 percent recorded for Q3 2020.
The increment in the bank’s NPLs is indicative that its debtors are defaulting on loan repayment possibly because of the negative impact of the Covid pandemic on businesses and households.
Read details of GCB’s Q3 2021 Financial Statement below:
pdf (19) by Fuaad Dodoo on Scribd
