Belinda Ayamgha, GNA
Accra, July 06, GNA - The GCB Bank Limited has recorded a decline in its earnings for the 2017 financial year following its purchase and assumption of UT Bank Limited and Capital Bank Limited in the year under review.
The Bank’s profit before tax declined by 29 per cent from GH¢467 million in 2016 to GH¢332 million in 2017.
Mr Jude Kofi Arthur, Chairman of the Board of the GCB Bank, said the decline in its profitability was mainly due to the significant increase in its operating expenses and impairment charges, which went up by 30 per cent, most of it related to the assumption of the two banks.
Speaking at the GCB Bank’s 2017 Annual General Meeting in Accra on Friday, Mr Arthur said “the take-over of these two banks no doubt had had a significant impact on our expenditures, staffing, and systems rationalisation; which affected our bottom-line for 2017”.
The performance was also impacted by the rapidly declining Treasury Bill returns, which constitute a major part of the Bank’s investment portfolio and the generally unfavourable business environment in 2017.
The Bank however recorded some modest growth of 16 per cent in its interest income, against a significant increase of 119 per cent in interest expense due to the legacy accounts inherited from the take-over of UT and Capital Banks.
It also recorded encouraging growth of 52 per cent in net forex trading income from GH¢27million in 2016 to GH¢41 million in 2017.
“Our non-funds based business also recorded encouraging growth, with Net fees and commissions of 20 per cent, leading to a modest growth of 5.0 per cent in total revenue from GH¢1,071 million in 2016 to GHC1,124 million in 2017,” he noted.
The Bank also recorded growth of 58.4 per cent in its total assets, from GH¢6,075 million in 2016 to GH¢9,627 million in 2017, a growth in deposits of 63 per cent from GH¢4,260 million in 2016 to GH¢6,924 million in 2017.
In light of these modest gains and the decline in earnings, the AGM approved the payment of a dividend of GH¢0.10 per share to its shareholders, payable on July 30, 2018 to all shareholders registered in its books as at June, 15th 2018.
The approval of the AGM to pay the dividend makes the GCB Bank the only listed Bank on the Ghana Stock Exchange to pay dividends for 2017.