Shareholders of the state-owned bank, GCB, have given their approval to the board to raise GHS1 billion in a bid to strengthen the bank’s capital amid a challenging operating environment.
The decision was made during the bank’s 29th Annual General Meeting, where shareholders expressed confidence in the management’s efforts.
The resolution passed by the shareholders allows for the raising of GHS750 million in common equity and GHS250 million in preference shares.
This move will enable the bank to meet regulatory capital adequacy ratio requirements, enhance its ability to pursue deals, seize opportunities in the market, and maintain its core strengths. Additionally, it will help the bank access funding markets more effectively and instill confidence among stakeholders.
The capital raise will also support targeted investments in digital transformation, driving the bank’s business strategy, and boosting its Capital Adequacy Ratio (CAR) from 7.59% as of December 2022 to 14% by the end of the year.
Managing Director of GCB, Mr. Kofi Adomakoh, described the approval from shareholders as a vote of confidence in the board’s efforts to navigate the challenges faced by the industry. It signifies the bank’s commitment to executing its four-year strategy, focused on revenue growth, operational excellence, and talent development.
Despite the challenging economic environment, GCB experienced a 24% growth in Total Operating Revenue in 2022, reaching GHS3.0 billion. This growth was observed across all key revenue lines, with net interest income increasing by 11%, fees and commissions growing by 7%, and trading income surging by 208% to GHS487 million. Operating costs rose by 29% to GHS1.6 billion, mainly due to inflationary factors and currency depreciation.
Although GCB achieved a pre-provision profit growth of 22% to reach GHS1.4 billion, the bank recorded a loss before tax of GHS743.5 million. This was primarily attributed to an impairment charge of GHS2.1 billion, resulting from the impact of the Domestic Debt Exchange Programme on the bank’s investments in government securities.
Despite the headwinds, GCB Bank’s total assets saw a 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 going forward.