GCB’s performance for the past six months encouraging – Dornoo
Briefing the press in Accra on the results for the six months, Mr Simon Dornoo, Managing Director, said despite the significant increase in credit impairment losses, the Bank recorded a profit before tax of GH¢26 million, due to strong revenue growth.
Revenues for the second quarter were up 47 per cent to GH¢178 million mainly as a result of a strong growth in net interest income.
Net Interest Income rose 79.6 per cent to GH¢160.24 million for the six months ending June from GH¢89.21 million in 2009.
Mr Dornoo said the bank, however, expected a slow pace of revenue growth for the remaining six months of the year due to compressed margins as a result of declining interest rates and the re-investment risk associated with the repayment of the Tema Oil Refinery debt by government.
“In terms of outlook, we expect an improved overall performance in line with the general improvement in macroeconomic conditions.
“Revenues are however forecast to grow at a relatively slower pace in 2010 mainly due to compressed margins as we respond to declining inflation and further decreases in Monetary Policy Rate,” Mr Dornoo said.
He said the bank expected to partly offset the impact of these developments on revenue through growth in business volumes that was typical in the second half of the year.
Mr Dornoo said the strong revenue growth had helped to absorb the higher impairment charges of nearly GH¢74 million.
“The sharp increase in credit impairment loss reflects the further deterioration of balance sheets of companies operating in the downstream oil sector, affected by the sharp increase in crude oil prices in 2008 and mining sector,” Mr Dornoo said.
According to him, the bank did not foresee a repeat of the increase in impairment losses for the rest of the year.
“We do not expect further increases in impairment losses for the rest of the year as we work with the government to settle the debt owed to GCB by state-owned Tema Oil Refinery,” Dornoo said.
Loans to customers during the period fell by 24 per cent to GH¢964.2 million down from GH¢1.26 billion as a result of the partial repayment of loans.
Customer deposits increased by nine per cent over the last six months to GH¢1.3 billion up from GH¢1.2 billion for the corresponding period in 2009.
Mr Dornoo said the bank would work to further reduce cost of operations.