Consolidated Bank Ghana (CBG) posted a profit of GH¢48.1 million at the end of the first quarter of the year.
This is more than three
times the figure the bank recorded in the same period last year when profit
stood at GH¢10.5 million.
According to the summary
of the bank’s financial statement published in the dailies yesterday, operating
income also shot up to GHS328.4 million in the period under review as against
the same period last year when the figure stood at GH¢197.1 million.
Impairment gains or
financial assets dropped from GH¢71.7 million to GH¢50.0 million while loans
and advances to customers also dipped drastically from GH¢789.1 million in the
first quarter of the year to just GH¢79.4 million during the same period last year.
While the bank’s total
assets stood at GH¢11.1 billion in March 2023, the figure went up to GH¢15
billion in the first quarter of the year. On the other hand, total liabilities
also shot up from GH¢11.8 billion to GH¢13.7 billion in the period under review.
Risk management
The bank, in its report,
admitted that its activities expose the business to risks.
“These risks are managed
in a targeted manner. The core functions of the bank’s risk management are to
identify all key risks for the bank, measure these risks, manage the risk
positions and determine capital allocations,” it said.
The bank said risks
arising from financial instruments to which the bank is exposed include credit
risk; liquidity risk; market risk and operational risk.
It said the bank regularly
reviewed its risk management policies and systems to reflect changes in
markets, products and best market practices, adding: “The bank aims to achieve
an appropriate balance between risk and return and minimise potential adverse
effects on the bank’s financial performance.
Meanwhile, the bank was
able to half its non-performing loan ratio from 26.73 per cent in March 2023 to
13.44 per cent in the period under review.
Recapitalisation
CBG recently received a
GH¢2.5 billion capital injection from its sole shareholder, the government, as
part of measures to position it for growth and restore balance sheet
resilience.
By this, the bank, formed
some five years ago through the amalgamation of seven defunct banks during the
country’s financial sector crisis, becomes one of the first among the
commercial banks in the country to access funds from the Ghana Financial Sector
Fund (GFSF), created to support banks whose balance sheet was impaired as a
result of the implementation of the Domestic Debt Exchange Programme (DDEP).
The support, therefore,
makes CBG, which has grown to become one of the major financial institutions in
the country, more solvent and liquid to discharge its core mandate of financial
intermediation without any challenges.
According to the Managing
Director of the bank, Daniel Wilson Addo, “The bank is ideally positioned to
continue its growth trajectory and, most importantly, to continue to make a
positive impact on the economy.”
Areas of focus
Through the support, he
said, Ghana’s agricultural and small-scale enterprise (SME) sectors are
expected to witness a major transformation this year because the bank intends
to rump up its financial support for the two sectors.
Meant to unlock the
potential of two of the most important sectors of the economy, in line with the
government’s overall ambitions for the year, the move by CBG, Mr Addo said, is
also expected to boost food production to contain inflation, ensure food security
and expand exports, as well as create jobs for the mass of the people while
providing a source of financial livelihood for small businesses in dire need of
capital.
Shedding some more light
on the SME sector, he said CBG had played a pivotal role in providing as much
as GH¢1.6 billion in loans to cover 5,600 businesses, introduced innovative
programmes such as the ‘CBG SME loan Adesua’ series and optimised loan processing
for swift access.
“The initiatives in the
SME sector have earned the bank various awards including the Euromoney Award
for SME Market leadership in 2022 and 2023,” he added.
He said in the corporate
and institutional banking segment, CGB has participated in loans totalling
GH¢2.35 billion, either as a lead arranger or transaction adviser, benefitting
crucial sectors such as energy, tourism and education.
“In the immediate future,
CBG would deepen investment in digitisation, upscale support to SMEs, further
prioritise customer service and ensure greater operational efficiency,” Mr Addo
said.
The overriding ambition is
to build market leadership in SME financing while building a resilient
institution.