Standard Chartered Bank, (Stanchart) Ghana managed to overcome what it describes as the increasingly tough market conditions within the economy to record a double digit growth in income and profit in the third quarter of the year.
Stanchart, which was recently adjudged the Best Bank in Financial Performance at the 13th Ghana Banking Awards organised by Corporate Initiative Ghana, posted a GH¢198 million in profit after tax in the period under review.
This represents a 33 per cent positive variance over the GH¢148 million recorded during the same period in the previous year.
The bank, which was also awarded the Best Bank in Trade Finance, also saw its operating income soar from GH¢303 million in the third quarter of 2013 to GH¢385 million in the same period this year.
The Chief Executive Officer of the bank, Mr Kweku Bedu-Addo, who made this known when the bank took its turn at the ‘Facts behind the Figures’ session at the instance of the Ghana Stock Exchange (GES), said the bank was able to record “Strong delivery on key performance metrics such as Return on Equity, Earnings Per Share and Cost to Income ratio during the period under review”.
“The balance sheet of the bank also remains in excellent shape; the bank is strongly capitalised and well diversified”, he said.
Non-performing loans (NPLs)
In spite of the remarkable performance of the bank, its NPLs for the period remained high at 18 per cent.
But in explaining the cause of the high NPL, Mr Bedu-Addo said, “this is coming from the corporate side and not the retail side”, adding that due to the challenges within the economy “corporates are stressed”.
The unadjusted NPL ratio for the banking sector in the third quarter of 2014 declined to 12.3 per cent compared to 12.9 per cent in the corresponding period last year.
Since last year, the ratio of non-performing loans (NPL) within the banking industry has been gradually decreasing, according to the periodic reports of the Monetary Policy Committee (MPC) of the Bank of Ghana.
For the current year, the MPC report noted that the NPL ratio declined to 12.8 per cent in May 2014 compared to 13.4 per cent in May 2013, while NPLs (less loss provisioning) ratio remained broadly unchanged at 5.3 per cent.
Re-organisation
Mr Bedu-Addo said the bank was undergoing reorganisation to basically reposition the business.
“We have had a model that works very well for us over the past decades but since the world has changed since then, financial markets are reorganising themselves all over the world and therefore, we need to adapt to survive”, he said.
Mr Bedu-Addo said, “We have the model that works for us but we have to move with the current realities”.
At the headline level, he said, the bank intended to “achieve double digit revenue growth, profitability growth, watch our NPLs and make sure that we still have capital that will make us liquid.”
Awards
In expressing the bank’s delight about the two awards it annexed at the banking awards, Mr Bedu-Addo said, “It’s always good to be recognised by an independent body on your performance”, he said and added that, “I don’t think they are wrong”.
About the Best Bank in Trade Finance award, he said, “In my view, their (CIG) assessment of our achievement was spot on. We are a trade bank and we are very good at what we do all over the world in terms of trade finance and I was not surprised that they independently came to that conclusion using publicly available data”.
On financial performance, Mr Bedu-Addo also said, “I believe you know the results and you know that year-on- year we have been doing very well so again I was not surprised when we came up tops”.
Motivation
He said the awards would motivate the bank to work harder in the coming years.
“We have a lot of things that we are focusing on; our reorganisation, client proposition which means we want to be more client-centric, improve client proposition and offer more innovative products to the market, build on financial inclusion and improve financial literacy through our sustainability programme.