GCB Bank performed well despite COVID-19 challenges

Mr Jude Kofi Arthur, the Board Chairman of GCB Bank

Despite the challenges of the COVID-19 pandemic, the GCB Bank has performed reasonably well for the year 2020.

The Bank recorded growth in Profit before Tax of GH¢ 610.83 million from GH¢ 573.67 million in 2019, up 6.5 per cent attributable to revenue growth.

Mr Jude Kofi Arthur, the Board Chairman of the Bank, speaking at its Annual General Meeting (AGM), said the improvement in financial results was supported by balance sheet growth and income diversification.

He said the net interest income was up 29.1 percent, from GH¢ 1,168.45 million to GH¢ 1,508.70 million.

The Board Chairman said the net trading income grew by 17.6 per cent to GH¢ 166.63 million from GH¢ 141.75 million whilst net fees and commission income also increased by 15.1 percent to GHS 277.98 million from GH¢ 241.51 million.

He said the operating income increased from GH¢ 1,572.87 million to GH¢ 1,967.68 million, reflecting an increase of 25.1 per cent over the prior year.

“Operating expenses went up by 22.2 per cent from GH¢ 924.58 million to GH¢ 1,129.64 million due to COVID-19 related expenditures. The cost-income ratio improved to 57.4 percent compared to 59.1 percent in 2019,” the Board Chairman added.

He said the Bank’s total assets recorded a growth of 23.5 per cent from GH¢ 12.52 billion in 2019 to GH¢ 15.45 billion in 2020.

The growth was funded mainly from a 21.8 per cent increase in deposits from GH¢ 9.82 billion in 2019 to GH¢ 11.96 billion in 2020 with net customer loans increased 0.3 percent to GH¢ 3.81 billion in 2020 from GH¢ 3.80 billion in 2019.

He said the Bank’s equity recorded a growth of 23.0 percent from GH¢ 1.78 billion in 2019 to GH¢ 2.19 billion in 2020.

Mr Arthur said the pandemic weighed heavily on the performance of stocks listed on the Ghana Stock Exchange, and that with the financial stocks being significantly affected, the Bank’s share price experienced volatility during the year with a high of GH¢ 5.10 and a low of GH¢ 3.40, reflecting the lowest price in the last four years.

He said the Bank was strong and well capitalised for its business mix and risk profile, and “we will continue to deliver best in class return on equity while making the appropriate investments in our people and culture to serve our clients.”

The Board Chairman said sustaining a competitive edge in 2021 and beyond required the Bank to effectively navigate the changing dynamics of the banking industry.

He said Management of the Bank recognised that the intensifying competition and challenging macro-economic environment required banks to be nimble and innovative to serve their customers more efficiently.

Mr John Kofi Adomakoh, the Managing Director of GCB Bank said the investment in electronic banking solutions, digital capabilities, as well as intensified sales and marketing, helped Management to grow transaction volumes, win new customers, increase deposits and grow loans.

He said treasury continued to benefit from close collaboration with other business units within the bank driving revenue growth of 46 per cent year on year.

The Managing Director said 2020 was a difficult and challenging year for the Bank’s Corporate Bank and SME businesses significantly due to the impact of COVID-19.

“Corporate Bank reported revenue growth of 2 per cent attributable to volume growth in deposits and fee earning transaction volumes, however, significantly higher credit impairment charges on a few clients resulted in the business recording a loss for the year,” he said.

Mr Adomakoh said despite growth in revenue of 29 per cent supported by deposit and loan growth, SME business reported a lower profit compared with the prior year, and that profits were lower by 34 per cent, mainly stemming from higher impairment charges.

On the digital front, the Bank’s mobile money wallet platform, G-Money, saw significant growth in customer base and payment transaction volumes.

He said going into the future, G-Money would be critical in leading the Bank’s digitisation agenda, providing an expanded payment channel and convenient banking services for individual and corporate customers.

He said in playing an additional role as a national bank, GCB had supported the government’s efforts on the financial sector bailout programme.

The Managing Director said the Bank was a key stakeholder in the GCB Real Estate Investment Trust, which constructed 204 townhouses in Tema for sale to public sector workers under a mortgage scheme.

As part of the scheme, the Bank will provide mortgage financing facilities to potential purchasers of the housing units.

He said to improve the data security and controls within the payments and operating environments, the Bank achieved a PCI-DSS certification in 2020 and an International Organisation for Standardisation (ISO) certification project scheduled to complete by 2021.

Mr Adomakoh said a Security Operation Centre was also set up to provide visibility on the Bank’s network and systems infrastructure to proactively prevent security breaches.
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