Ghana Commercial Bank's profit falls 50% on oil debt

State-owned Ghana Commercial Bank (GBC) experienced a whopping 50-percent drop in profit in 2009 compared to the previous year.

Profit after tax stood at GH¢18.8 million which was 50 percent below the 2008 figure of GH¢37.6 million.

This was contained in the annual report issued by the bank for the last fiscal year.

Board Chairman of GCB, Mr Pryce Kojo Thompson, tells shareholders that the dip in profit was largely due to the indebtedness of the Tema Oil Refinery to which GCB is a major lender.

“The reduction in profit after tax was due largely to the relatively higher provision made against loans and advances to companies in the downstream oil sector.

“Abnormal increase in the international prices of crude oil and refined petroleum products in 2009 presented serious challenges to the country’s downstream oil sector. Traditionally, your bank (GCB) has been the main financier to the country’s oil sector, especially the Tema Oil Refinery (TOR) Limited,” the statement said.

“Despite the reduced profits, the board still deems it fit to propose a dividend of GHp3.56 per share, amounting to GH¢9.4 million compared with GH¢15.9 million in the previous year.”

Although the bank is still licking its wounds over the loss, Mr Thompson says there are better times ahead.

“The prospects for growth of the Ghanaian economy are bright despite the challenges in the international economy. This is buttressed by the economic stabilization and growth agenda set by the government, coupled with the imminent commercial production of oil in the latter part of the year,” Mr Thompson said.
Source: myjoyonline