GCB Bank shareholders authorise board to raise GH₵1 billion to boost capital
Shareholders of State-Owned Bank, GCB, have authorised the board to raise GH₵1 billion to shore up its capital in a vote of confidence of management efforts in a difficult operating environment.
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In a special resolution passed during the bank's 29th Annual General Meeting, the shareholders gave their confidence to the board to raise GH₵750 million in common equity and GH₵250 million in preference shares.
The move will allow the bank to meet regulatory capital adequacy ratio requirements, enhance deal-making capacity and take advantage of opportunities available to the Bank while preserving its core strengths as well as strengthen access to funding markets and bolster confidence in the Bank.
It will also support targeted and prioritized investment in digital transformation and ultimately help to drive business strategy as well as boost the bank's Capital Adequacy Ratio (CAR) from the current GH₵7.59 per cent as of December 2022 to 14 per cent by the end of the year.
The Managing Director of GCB, Kofi Adomakoh, described the shareholders' approval as a vote of confidence in the efforts of the board to scale the difficulties in the industry.
It is also an indication of the bank’s core strengths and commitment to executing its four-year strategy, aimed at driving revenue growth, operational excellence, and talent development.
GCB in the 2022 saw its Total Operating Revenue grew by 24 percent to GH₵3.0 billion despite facing a challenging economic environment.
This was underpinned by broad based growth across all the key revenue lines. Net interest income was up 11 percent while fees & commissions grew seven per cent.
Trading Income was phenomenal with a growth of 208 percent to end at GH₵487 million. Operating cost went up 29 percent recording GHS 1.6 billion on account of inflationary and currency depreciation effects.
Pre-provision profit was up 22 percent to close at 1.4 billion reflecting the good progress the Bank made during the year in executing its strategy.
Profit before tax was however a loss of GH₵743.5 million owing to impairment charge of GH₵2.1 billion largely due to the impact of the Domestic Debt Exchange Programme on the Bank’s investments holding in government securities.
Despite the headwinds, GCB Bank’s total assets saw a remarkable growth, surging from GHS 18.4 billion in 2021 to GHS 21.5 billion in 2022, bolstered by customer deposits, which saw a substantial increase of 28 per cent, reaching GH₵17.8 billion.
Total loans and advances also experienced robust expansion, growing by 27 per cent to GH₵5.5 billion.
Commenting on GCB’s performance, the Board Chairman, Jude Arthur, 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 remained a viable business, well-positioned for future growth and value creation.
The bank acknowledged the importance of implementing prudent cost management measures going forward.