GCB Bank PLC's strategic shift to strong sales and a customer-centric focus continues to yield results despite the challenging operating environment. This strategy underpins the Bank’s impressive deposit growth of nearly GHS10 billion at the end of quarter three (end 3Q2024), supporting the strong balance sheet expansion thus far.
Marching on with profit through nine months of 2024 (9M2024): The 9M2024 numbers continue the profit trend despite the prevalent cost pressures largely resulting from the challenging operating environment. The Bank posted a healthy 21.04% year-on-year growth in profit before tax to GHS1.01 billion over 9M2024, following modest growth in total revenue (largely due to tightening spreads) and a 61.2% decline in impairment charges for the period.
Interest income grew by 9.5% year-on-year. Similarly, net fees and commission income grew by 34.8% over 9M2024 from the increased earnings from electronic services, trade services, processing, and facility fees. This profit outturn is significant within the context of increasing costs from interest expense, fees and commission expense, and other operating expenses, which reflect the prevailing market dynamics.
The Bank relied on interbank borrowing to close the regulatory cash reserve gap following the introduction of the dynamic Cash Reserve Requirement (CRR) directive on April 1, 2024, significantly impacting the cost of funds. The Cedi depreciation and inflation-induced spikes in expenses also drove operational costs higher. However, a sharp decline in impairment loss, which resulted from the Bank's enhanced risk management and risk mitigation strategies, moderated the impact of the rising operational costs and the increased interest and fees & commission expense.
Deposit growth drives balance sheet expansion: The size of the balance sheet also continues to grow well ahead of the industry average, reaffirming the Bank's systemic importance. Driving the balance sheet expansion is the strong deposit growth in a period of heightened cost-of-living challenges and macroeconomic uncertainty, reflecting clients' unwavering confidence in the Bank's resilience. Total deposits for the period grew 43.4% year-to-date to GHS31.4 billion at the end of 3Q2024, which is a testament to the Bank’s strategic deposit mobilization drive. On a year-on-year basis, deposits grew by 52.9%, which compares favourably with the industry-wide deposit growth of 18.8% year-to-date and 29.4% year-on-year as of the end of August 2024. Motivated by the new CRR directive and the growing deposits, the Bank grew its loan assets by 52.6% year-to-date (+63.1% year-to-date), significantly improving our Loan-to-Deposit Ratio (L/D ratio).
Proactive risk management approach enhancing asset quality: The impressive 63.1% growth in the loan book in a still challenged operating environment unsurprisingly increased our Risk Weighted Asset (RWA) for the period, resulting in the one percentage point decline in our Capital Adequacy Ratio (CAR) position year-on-year to 16%. However, the Capital Adequacy ratio for the period (with and without forbearance) remains above the regulatory threshold of 10%. The Bank’s proactive risk management approach also remains intact, impacting positively the Non-Performing Loans (NPLs) ratio which stood at 15.5%.
The healthy profit position underscores the growth in shareholder's equity position: Equity surged by 47.4% year-on-year to GHS 3.51 billion at the end of 3Q2024 (+25.5% YTD) due to the increased profit for the period as the Bank continues to improve shareholders' value. This growth in equity underscores our strong financial footing and demonstrates the Bank's capacity to strengthen its capital position through internally generated funds. Consequently, Earnings Per Share (EPS) increased to GHS 3.09 for the period. Return on Equity (RoE) also reached 26.3%, reflecting efficient capital utilisation, with Return on Assets (RoA) also closing the third quarter at 2.6%.
The Bank’s end of 3Q2024 performance underscores its commitment to maintain a track record of impressive financial results period after period. The Bank is moreover positioned as a partner for life for its stakeholders and its duty to undertake sustainable corporate initiatives and activities which deliver additional value to them are well in focus.
The “Go Beyond” Campaign – GCB’s Customer-centric approach: In the quest for a more customer-centric focus, GCB Bank launched the “Go Beyond” campaign to enrich customer experiences and inspire staff to exceed customer expectations across all touchpoints. The campaign emphasizes the principles of “Availability,” “Responsiveness,” “Empathy,” “Innovation,” “Consistency,” and “Speed”, aimed at delivering exceptional service to its over 2 million customers. Strategic activities, like the Micro & Small Enterprises Workshop, and extensive training programs for staff are expected to positively enhance customer satisfaction and business performance going forward. The Bank continues to deepen its engagement with key stakeholders, emphasizing sustainable success through enhanced staff interactions, improved customer experience, and a comprehensive corporate social responsibility (CSR) agenda.
Impacting Society through CSR: The Bank’s CSR efforts aim to uplift communities where it operates. The CSR agenda focuses on the environment, economy, society, and governance. Notable initiatives include building school blocks, providing health infrastructure, enhancing sports facilities, and supporting youth development programs.
Our efforts continue to receive the deserved recognition: In August 2024, the Chartered Institute of Marketing, Ghana (CIMG) adjudged GCB Bank as the “Marketing Oriented Bank of the Year”. This is among the list of many other awards including Best Mobile Banking App of the Year 2023, Best Digital Banking Team of the Year 2023, Global Fintech Innovation Awards 2023, Legacy Banking Brand of All Time, 2023, and Chamber (Wholesale & Investment) Bank of the Year. These awards demonstrate our consistent performance on all fronts as we strive to effectively deliver first-class banking solutions and value to stakeholders.