Ghana Commercial Bank doubles profit

Ghana Commercial Bank Limited (GCB), the largest indigenous Bank in Ghana, with over 130 branches nationwide has doubled its profit for the period ended September 2008.

The bank’s main revenue lines include interest income, fees and commissions from customer account servicing and letters of credit. Other operating incomes include gains made from financial transactions.

Interest Income increased by 54% from GH¢ 78.55 million to GH ¢120.92 million whilst Fees and Commissions increased by 30% from GH¢25.39 million for the period ended September 2007 to GH¢33.13 million in September 2008. Gains made from financial transactions however fell significantly from GH¢2.72 million to GH¢0.62 million.

These resulted in 108% increase in Net Profit from GH¢12.17 million in 2007 to GH ¢ 25.27 million in 2008.
Based on this performance, shareholder value has improved. Earnings per Share (EPS) increased from GH¢0.061 in 2007 to GH¢0.127 in 2008.

GCB undertook a Right Issue last year to raise funds to enable the bank increase its capital base and take advantage of numerous business opportunities; to automate all branch processes and increase the number of ATMs and to introduce a wide range of products and services that will make GCB very competitive.

Even though management of the bank has not indicated the reasons behind their exceptional performance, we presume that the bank has started implemented some of those identified projects and that has contributed to the impressive performance.

The Bank’s equity recorded 14.56% price appreciation so far this year. The price per share appreciated from GH¢0.9951 in January to a current price of GH¢1.14. It is currently traded at a P.E ratio of 9 multiples.

Credit: Stephen Odoi Larbi
Source: The Chronicle