GCB posts impressive financial results - Puts recapitalisation plans on hold

GCB Bank PLC has put its capital restoration plans on hold following an impressive performance that improved its capital adequacy ratio from 17.9 per cent at the end of 2022 to 19.1 per cent at the end of March this year.

The ratio, which establishes that a bank has enough capital on reserve to handle certain risks, went up above the Bank of Ghana’s recommended 13 per cent. At its 29th annual general meeting, shareholders of the bank approved an equity increase of up to GH¢1 billion to meet regulatory capital adequacy ratio requirements and enhance the bank’s deal-making capacity.

The increase in capital became necessary following the domestic debt restructuring programme which hit hard at the capital of banks in the country. The bank subsequently determined to raise GH¢550 million in capital and secured the approval of the Securities and Exchange Commission and the Ghana Stock Exchange.

But following an impressive 2023 and first quarter 2024 financial performances, the bank has now decided to put the exercise on hold.

AGM

Speaking at the 30th AGM of the bank, the Board Chairman, Daniel Kwaku Tweneboah Asirifi, said based on the 2023 financial performance and current market conditions, it was the belief of the board that the bank could undertake its key strategic initiatives and investments to remain competitive.

He said the bank was in a position to also continue delivering sustainable growth and value to its shareholders without immediate capital rise. “We will continue to assess the position to ensure that the bank’s capital level is sufficient to support our business objectives and drive long-term success,” Mr Asirifi said.

Financial performance

The bank’s financial performance of last year was buoyed by increased revenue and profits.

From a loss of GH¢593.39 million in 2022, GCB Bank recorded a profit of GH¢994.10 million, largely driven by growth in total revenue which increased by 26 per cent to GH¢3.78 billion.

Total deposits also grew from GH¢17.7 billion to GH¢21.8 billion, with loans and advances also increasing from GH¢5.48 billion to GH¢6.69 billion. The bank’s total assets grew from GH¢21.37 billion, with total liabilities also growing from GH¢19.51 billion to GH¢24.13 billion.

The Board Chairman said the performance underscored the dedication and resilience of the management and staff which positioned the bank for continued success in the future. Mr Asirifi said that was the final year of implementing the bank’s four-year strategy of dominance.

“Last year, the board fully engaged management to revalidate the strategy for relevance on the back of economic developments and rapidly evolving customer expectations. “Today, we remain focused on our strategic pillars of revenue growth and profitability, operational excellence, and people and talent,” the board chairman said.

Mr Asirifi said the bank had implemented comprehensive revenue growth and cost optimisation measures to restore financial health and drive sustainable growth through innovative product development, targeted marketing initiatives and strategic partnerships.

Furthermore, he said the bank prioritised its investments in technology and digital transformation initiatives to drive operational excellence, improve customer experience and unlock new revenue streams.

“On this basis, GCB Bank has reinvented digital banking in the country with the relaunch of our revamped RECODED Mobile App in December 2023,” Mr Asirifi stated.

Accelerating revenue

The Managing Director of GCB Bank, Kofi Adomakoh, for his part, said the bank made significant progress in its efforts to drive revenue growth, improve profitability and grow its market share.

He said the 2023 financial results benefited from improved internal collaboration, enhanced relationship management and targeted marketing strategies. “This helped to increase the customer base across all business segments and transaction volumes”.

“In our commercial banking segment, we have rolled out a new operating model aimed at boosting sales, improving relationship management and enhancing the overall customer experience,” Mr Adomakoh stated.

He said the bank had also decentralised its approach to sales by setting up hubs spread across the country to ensure frequent engagement with clients and ensure the solutions are tailored to their needs.

Mr Adomakoh said GCB Bank had also invested in critical capabilities, including new digital offerings, training of its staff and developed product programmes dedicated to that segment, with the view to improve key matrix such as credit turnaround time.

Retail banking

In the retail banking segment, the Managing Director said the bank had made significant progress in aligning its sales resources in its branches to the business opportunities in each market area.

“We have streamlined accountability, responsibility and decision-making structures between sales roles and operations role within our branch network.  “This is to achieve increased customer engagement, improve revenues and achieve operational efficiency,” the Managing Director of GCB Bank said.

Mr Adomakoh added that the bank would continue to sharpen its focus on capital optimisation and strengthen its risk management and transaction banking capabilities through training of relationship managers, prioritised and targeted investments in technology and regular review of the risk management framework.

“This comprehensive approach, coupled with our intensified efforts on cross-selling will enable us to achieve higher revenue growth rates especially non-funded income,” he added.