GCB Bank recordedstrong profit growth in the first half of 2024 (1H 2024) compared to the same period in 2023. This strong performance was primarily driven by a significant increase in customer deposits year-to-date (YTD), coupled with dedicated effortsatoptimizing operational efficiency.
The 1H2024 financial performance results from the Bank's strategic shift to a strong focus on sales, transaction banking and a customer-centric approach. Profit Before Tax for the period increased by 35 percent year-on-year (y/y) to GHS 700.3 million, driven by growth in interest incomeand supported by a 21 percentyear-to-dateincrease in customer deposits and an increase in net fees and commission income.
Total revenueincreased by 5 percent y/yto GHS 1.89billion at 1H 2024. Net interest income grew by 5 percenty/yto GHS 1.43 billion in 2024, with net fees and commission income also increasing by 28 percent to GHS 245.4 million. Increased earnings from electronic services, trade services, processing and facility fees drove the net fees and commission growth over the half-year period. Additionally, net trading income contributed GHS 211.8 million to revenue in 1H, 2024.
Operating expenses for 1H 2024 came in at GHS1.08 billion, up 17 percent from GHS921.1 million in 2023. This increase was driven by inflation and currency depreciation pressures.
Impairment loss on financial assetsfor the period declined by 70 percent y/yto GHS104.8 million in1H2024. This sharp decline in impairment loss resulted fromthe Bank's enhanced risk management and risk mitigation strategies.
The balance sheetalso grew substantiallyin the review period.Total assets surged to GHS33.20 billion, representing a 22percent increase YTD. A significant deposit growth, which reflects clients' unwavering confidence in the Banks' resilience amidst the prevailing macroeconomic uncertainties, underscored the increase in the balance sheet size.
Shareholders' Equity surged by 15percentYTD to GHS 3.22 billion in 1H 2024 due to the increased profit for the period, bolstering the Bank's financial performance and increasingshareholders' value. This growth in equity underscores our strong financial footing and demonstrates the Bank's capacity to generate internalcapital.
Earnings per share also grew, rising from GHS 2.52 in 1H 2023 to GHS 3.20 in 1H 2024. Also, the Capital Adequacy Ratio stood at 18.5 percent, well exceeding the regulatory requirement of 10 percent. Return on Equityreached 26.2 percent, reflecting efficient capital utilization, while Return on Assets settledat 2.8 percent.
Commenting on the 1H 2024 performance, Mr John Kofi Adomakoh, Managing Director of GCB Bank PLC, said:"GCB continues to record strong and higher quality earnings as well as improved returns to shareholders despite the challenges and uncertainties in the market combined with intensifying competition".
Mr. Adomakoh explained that a strong focus on sales and transaction banking, growth in the Bank's client base and growing relationships, stringent credit underwriting standards coupled with cost-effectiveness, strong governance, and effective risk management and control drove the 1H 2024 performance.
Concerningthe intended capital raise,Mr. Adomakoh indicated that the Bank decided to put the capital raise on hold on the back of strong financial performance in 2023. He revealed the Bank’scommitment to continue to rebuild capital through future profitswhile assessing capital requirements on an ongoing basis amidst heightened uncertainties in theoperating environment and regulatory developments. The GCB Managing Director sharedManagement's commitment to maintaining optimal capital levels to support strategic andbusiness objectives to drive long-term success and returns for shareholders.
The Bank's 1H 2024 results thus confirmthat GCB remains a beacon of financial stability and resilience, well-prepared to navigate the intricate financial landscape in Ghana with steadfastness, confidence and strategic foresight.
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