With a background of soaring inflation threatening to derail the country’s economic progress and an ever-increasing government fiscal deficit, GCB turned in a solid performance.
Profit growth stagnated in 2007, registering an increase of just 2% on 2006’s figure, but the bank managed to strengthen its capital base through a successful GC60m ($54.1m) rights issue. The issuance increased GCB’s single borrower capacity sixfold and enabled the bank to increase income on interest by expanding its lending to businesses involved in oil, mining and commerce. As a result assets grew by 49% during the year. Return on equity, however, fell from 28% to 15% and the bank’s cost-to-income ratio increased by 10 percentage points to 77%.
Stringent measures to recover bad debt and implement sound credit policies have succeeded in bringing GCB’s non-performing loan ratio down from 3% in 2006 to 2% in 2007. The bank has also focused on developing new technology. It rolled out an e-banking platform last year and invested in software to enhance service delivery. An example of this was the launch of the bank’s Pension Payment System that will allow smooth handling of pension payments. The bank also opened three branches in 2007, taking the total number of branches to 141.
In a tougher economic environment GCB did well to maintain its growth momentum from 2006. “When we put our strategic plan together last year we knew we needed to enhance shareholder value and quality of customer service. This two-pronged approach has paid off with this award as the best over-all bank in Ghana,” says GCB chief executive Lawrence Adu-Mante.
