The profit comes as these banks are able to undertake additional transactions including assets and investments, a condition which came along with the recapitalisation requirement policy.
The Bank of Ghana introduced the $77 million (GH₵400 million) recapitalisation requirement for universal banks in the country to meet before the start of this year.
The requirement was aimed at strengthening and making the banking sector more resilient to shocks as well as to help reposition the banks to better support the growing needs of the Ghanaian economy.
Some banks who met the requirement have hence been noted to have met the aim of the policy as they make profits in the first quarter of the year.
Here are 4 banks which recorded profit in the first quarter of 2019
1. Republic Bank
According to its unaudited March 2019 financials, Republic Bank recorded a 29 percent increase in its profit, from $2.2 million (GH₵11.3 million) a year before to $3.1 million (GH₵16 million) in the first three months of 2019. Increase in interest and operating income contributed significantly to the growth in the bottom line of the listed bank.
In terms of liquidity, the capital adequacy ratio shot up from 21.80 percent in 2018 to 30.12 percent. This was basically due to the increase in the stated capital, signalling the strength of the bank.
Non-performing loans importantly reduced to 18.96 percent in March 2019 from 23.85 percent.
2. Zenith Bank
For Zenith, one of the high rising tier one banks, profit went up significantly by 36 percent to GH₵66 million at the end of the first quarter of 2019. In March 2018, the profit was $8 million (GH₵41.7 million). The significant increase comes from growth in interest income particularly loans and net trading income or transfers.
Customer Deposit at the end of March 2019 was $656 million (GH₵3.4 billion), as against $ 617 million (GH₵3.2 billion) the same period last year.
Its stated capital remained however unchanged at $77 million (GH₵400 million), whilst statutory reserves was $47 million (GH₵243 million) at the end of March 2019.
3. Ghana Commercial Bank (GCB)
Ghana’s biggest bank, GCB Bank on the other hand, witnessed a 42.7 percent growth in its profit, from $7 million (GH₵37 million) in March 2018 to $12.5 million (GH₵65 million) in March 2019. Significant growth in net interest income and trading income were the major contributing factors.
The bank also remained strong with a capital adequacy ratio of 22 percent at the end of March 2019 and an NPL of 8.0 percent, the lowest in the banking industry.
It had the biggest deposits of GHc8.1 billion at the end of the first quarter of 2019, from GHc6.4 billion a year before. This was as a result of the takeover of UT and Capital Bank.
Stated capital was far bigger than the GH₵400 million required by the Bank of Ghana. The capital at the end of quarter one was $96.5 million (GH₵500 million).
4. Agricultural Development Bank (ADB)
ADB Bank also almost doubled its profit, from $2 million (GH₵12.1 million) in March 2018 to $4 million (GH₵20.8 million) in March 2019. Interestingly, though interest income reduced interest expense was also brought down significantly whilst net trading income shot up considerably.
Its stated capital was however $53 million (GH₵275 million) at the end of March 2019, lower than the $77 million (GHc400 million) requirement. $53.5 million (GH₵277 million) is believed to have been made available by the Ghana Amalgamated Trust to shore up the capital. However, income surplus was a negative $57 million (GH₵296 million).
It had one of the lowest capital adequacy ratios in the banking industry post recapitalisation at 16.30 percent whilst NPL was extremely high at 46.13 percent.