Republic Bank makes strong return to profitability

REPUBLIC Bank Ghana PLC made a strong recovery from a loss position of ¢61.13 million in 2022 to post a profit of ¢145.03 million last year.

This represents a percentage increase of  337.25%.

The bank’s total assets also closed the year in review with GH¢6.99 billion reflecting a significant increase of GH¢1.88 billion when compared with the 2022 figure.

The increase, which was primarily driven by a notable growth in money market placements in addition to growth in loans and advances, was supported by remarkable growth in deposits within the year.

It further posted a comprehensive income of GH¢145.03 million in 2023 as against the loss of GH¢22.70 million recorded in 2022. 

This increment of 739% is the result of a 41.90% improvement in the bank’s net interest income and a 72.64% decline in impairment losses on financial assets.

In spite of the dramatic financial turnaround, the bank, however, noted that it would pay dividends to shareholders in 2026 after the audit of the 2025 financial year.

Board Chairman, David Addo-Ashong, who announced this at the bank’s annual general meeting in Accra, pledged the bank’s commitment to prioritise customers, offer excellent services and embed a digitisation plan and culture in its approach for the year 2024.

Mr Addo-Ashong noted that the bank would dwell on a strengthened cooperation to provide debt relief, facilitate trade integration, tackle climate change and alleviate food insecurity to sustain an effective upside risk.

BoG expectations 

Mr Addo-Ashong stated that the Bank of Ghana expected banks to fully restore capital gaps caused by the Domestic Debt Exchange Programme (DDEP) last three years before the deadline of December 2025.

According to him, in line with the capital restoration plans approved by the Bank of Ghana, his outfit would unify the current holdings for the cash reserve ratio requirement on foreign currency-denominated deposits and domestic deposits for banks to ensure that outsourcing arrangements neither diminish regulated financial institutions (RFI) ability to fulfil their obligations to customers nor pose excessive risks to RFI’s through the exposure draft on outsourcing service. 

Bank’s performance in 2023

The Managing Director of the bank, Benjamin Dzoboku, in his report, revealed that with signs of an economic rebound in the horizon coupled with the recent decrease in the central bank’s monetary policy rate and further anticipated cuts in the coming months, the bank would post a further increment in profit in 2024.

“Following our performance for the 2023 financial year, we shall continue in the steps of pushing our customer-centric and innovation agenda as well as instil a performance-based culture in the bank as we seek to triple our profits by 2028,” he noted

Operating expenses

Giving further details about the financial position of the bank, he said operating expenses of the bank increased by 33.55% to GH¢433.61 million in 2023 in the wake of sustained inflationary pressures while staff wages and salaries cost also grew by 25.4% driven by the salary increment and increases in staff medical and fuel allowances. 

“Additionally, other operating expenses increased by 48.2% in support of the ongoing digital transformation drive including a 65.25% increase in software licensing and ICT cost,” he stated.

Loans and advances 

The bank withstood the year’s inflationary pressure that forced the BoG to hike interest rate at 30 per cent to grow its net loans and advance portfolio by 24%. 

This was an increment from GH¢1.96 billion in 2022 to GH¢ 2.43 billion in 2023.

The bank’s credit cards showed the most remarkable increase of 110.50%, from GH¢7.4 million in 2022 to GH¢15.6 million, reflecting the bank’s successful strategy of leveraging digital channels for growth.