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GCB Bank PLC has indicated that it has prepared for any second-round of a possible Domestic Debt Exchange Programme.
According to the bank, although the DDEP had an adverse impact on its operations, resulting in an impairment loss of ¢1.8 billion during the period, it has factored into its balance sheet to avert any further losses.
There are reports that government is considering another round of the DDEP as Ghana's solvency issues have not been resolved.
But speaking to Joy Business at the Bank’s 29th Annual General Meeting, Managing Director of GCB Bank PLC, Kofi Adomakoh, said financial institutions are having talks with Ministry of Finance and the Bank of Ghana to avert any adverse impact.
“It’s still unfolding, it’s evolving. The Banks and the financial institutions are still talking to Ministry of Finance and the Bank of Ghana. It’s understood, it’s anticipated and banks have taken recognition of that in their balance sheet”.
He added that any announcement of another round of a DDEP will not come to banks as a surprise.
“It may bring a little more impairment obviously but it’s not a surprise, as unfortunate as it may be, it’s still not a surprise. We anticipated a bit of this when we went through the first phase of the Debt exchange programme”.
The bank recorded a loss of ¢743.5 million in 2022, compared to a profit before tax of ¢832.0 million in the prior year. This loss is largely due to the impairment loss on investment in government securities of ¢1.8 billion due to the DDEP.
However, GCB Bank recorded a revenue of ¢3.0 billion representing an increase of 24% or ¢578.2 million compared to 2021. The growth was mainly driven by 11% increase in Net Interest Income and a 7% rise in Net fees and commissions.
Meanwhile, the bank has secured authorization from its shareholders to raise ¢1.0 billion from the Ghana Stock Exchange through a renounceable rights issue to procure additional listing of issued ordinary shares to develop a robust and comprehensive capital plan, following the adverse impact of Domestic Debt Exchange Programme.
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