GCB Bank records 24% YoY growth in revenue to hit GHS 3bn at end-2022
GCB Bank PLC demonstrated commendable resilience in its full-year (FY) 2022 financial results, despite facing a challenging economic environment. The bank’s total operating revenue surged by an impressive 24%, reaching GHS 3.0 billion, driven by robust growth across key revenue lines. However, the impact of impairment charges stemming from the Domestic Debt Exchange Programme (DDEP) weighed on the bank’s profitability.
Growth Across Key Revenue Streams
GCB Bank witnessed broad-based growth in its core revenue streams. Net interest income grew by 11%, while fees and commissions experienced a steady uptick of 7%. The standout performer was Trading Income, achieving a phenomenal growth surge of 208%, culminating in GHS 487 million. This performance underscored the bank’s continued focus on executing its strategic vision.
Cost Management Challenges
Despite its revenue growth, GCB Bank grappled with rising operating costs, which surged by 29% to GHS 1.6 billion. Inflationary pressures and currency depreciation effects were cited as the key drivers behind this increase. The bank acknowledges the importance of implementing prudent cost management measures going forward.
Profitability Takes a Hit
The bank’s profit before tax registered a loss of GHS 743.5 million, primarily attributable to impairment charges amounting to GHS 2.1 billion. The impairment charges predominantly reflected the impact of the DDEP on the bank’s investments in government securities. Nevertheless, GCB Bank’s strategic execution and resilience positioned it to navigate these challenges effectively.
Growth Trajectory in Total Assets
Despite headwinds, GCB Bank’s total assets showcased remarkable growth, surging from GHS 18.4 billion in 2021 to GHS 21.5 billion in 2022. Customer deposits played a pivotal role in bolstering the bank’s assets, witnessing a substantial increase of 28%, reaching GHS 17.8 billion. Total loans and advances also experienced robust expansion, growing by 27% to GHS 5.5 billion.
Board Chairman’s Optimistic Outlook
Commenting on GCB’s performance, Mr. Jude Arthur, Chairman of the Board of Directors, acknowledged the challenging economic backdrop. He highlighted the bank’s strong fundamentals, significant growth potential, and competitive advantages in the marketplace. Despite the impact of the DDEP, Mr. Arthur assured stakeholders that GCB Bank remains a viable business, well-positioned for future growth and value creation.
Focus on Future Growth
GCB Bank’s capacity to generate improved earnings remains robust, as evident in its strong first quarter 2023 performance, recording a Profit-Before-Tax of GHS 302 million. Mr. Kofi Adomakoh, Managing Director of GCB, emphasized the bank’s core strengths and commitment to executing its four-year strategy, aimed at driving revenue growth, operational excellence, and talent development.
A Clear Path to Market Dominance
The bank’s immediate priority is to rebuild capital through a GHS 1.0 billion equity raising initiative. Additionally, GCB Bank aims to improve its capital position through profit retention and landed property revaluation. Key initiatives to drive shareholder value include accelerating revenue growth, prudent risk management, enhancing customer experience, and investing in human capital.
A Legacy of Resilience and Growth
With over 70 years of operations, GCB Bank has established itself as a systemically important player and a market leader in Ghana’s banking sector. The bank remains determined to capitalize on future economic prospects, leveraging its strengths to emerge as an even stronger institution.
As GCB Bank navigates the challenges ahead, its robust performance, strategic focus, and market dominance aspirations position it favorably for sustainable growth and value creation in the dynamic financial landscape.
