Shareholders of State-Owned Bank, GCB, have authorised the board to raise GHS1 billion to shore up its capital in a vote of confidence in management efforts in a difficult operating environment.
In a special resolution passed during the bank’s 29th Annual General Meeting, the shareholders gave their confidence to the board to raise 750 million in common equity and 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 strengthening access to funding markets and bolstering confidence in the Bank.
It will also support targeted and prioritized investment in digital transformation and ultimately help drive business strategy and boost the bank’s Capital Adequacy Ratio (CAR) from the current 7.59% as of December 2022 to 14% by the end of the year.
Mr Kofi Adomakoh, Managing Director of GCB, 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 2022 saw its Total Operating Revenue grow by 24 per cent to GHS 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 per cent while fees & commissions grew 7 per cent.
Trading Income was phenomenal with a growth of 208 per cent to end at GHS 487 million. Operating costs went up 29 per cent recording GHS 1.6 billion on account of inflationary and currency depreciation effects.
Pre-provision profit was up 22 per cent to close at 1.4 billion reflecting the good progress the Bank made during the year in executing its strategy.
Profit before tax was a loss of GHS 743.5 million owing to an impairment charge of GHS 2.1 billion largely due to the impact of the Domestic Debt Exchange Programme on the Bank’s investments held in government securities.
Despite the headwinds, GCB Bank’s total assets saw 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%, reaching GHS 17.8 billion.
Total loans and advances also experienced robust expansion, growing by 27% to GHS 5.5 billion.
Commenting on GCB’s performance, Mr Jude Arthur, Chairman of the Board of Directors, 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 in the future.