Profit levels of banks in the country have dropped from 30.4 percent in 2007 to 19.7 percent in 2009, with the big ones appearing nowhere near the top of the chart, findings of a survey conducted by PricewaterhouseCoopers have shown. The rapid deterioration of the industry’s loan portfolio adversely impacted the profit margins, even though total income almost doubled. Impairment charges for non-performing loans increased over the three-year period from GH¢60 million in 2007 to GH¢266 million in 2009. Interestingly, Ecobank Ghana lost its number-one ranking to Bank of Baroda, one of the newest banks in the industry which moved to the top position on profitability ranking. Baroda had limited exposure to loans and advances in 2009 and did not suffer the high impairment charge facing most of the banks in the industry. Ecobank has therefore moved to second position. While Barclays Bank belonged to the loss-making group and occupied 23rd position, Ghana Commercial Bank (GCB) which holds the largest share of the industry’s deposits ranked 17th - dropping further from the 15th position it occupied in 2008. Stanbic Bank’s profit before tax margin shrank the most in 2009, causing the bank to drop from third position in 2008 to 20th position in 2009. First Atlantic Bank was unable to recover its costs and now moves to join UT Bank and Barclays Bank in the loss-making group. Overall, BSIC had the lowest ranking and also failed to recover cost. Guaranty Trust Bank Ghana’s (GT Bank) performance over the survey period was remarkable. The bank made significant strides by moving from the 24th position in 2007 to fourth position in 2009. The profitability of GTBank’s loan book went from 10.6 percent in 2007 to 19.3 percent in 200; and it appears to have controlled its costs with a cost income ratio of 50%, which is below the industry average. The smaller banks also managed to improve their net interest margin. Baroda maintained its lead ranking due to its minimal asset base. The loans granted by the bank were less than one percent of the industry’s total loans and advances. GTBank increased its net interest income by five times, from GH¢6 million in 2008 to GH¢29 million. The increase was driven mainly by interest earned from loans and advances. Unlike most banks, GTBank’s investment in government securities increased by only three percent in 2009. Overall, UT Bank’s net income margin shrank most in 2009 and resulted in the bank losing its second position, dropping to eighth. The report stated: “Amalgamated, Zenith and First Atlantic banks were the lowest ranked in terms of net interest margins on the chart. Although all of these banks managed to increase their interest income appreciably between 2007 and 2009, significant increase in interest paid to depositors impacted adversely on their net interest margins. “This is not surprising, as these banks offered competitive rates to attract and maintain customers.” By way of market share, GCB outperformed Barclays Bank and now holds the largest share of the industry’s deposits, which is 13.3 percent. The two banks leveraged on their extensive branch network to mobilise deposits. The report said: “Their relative rankings are not surprising as they both operate the largest number of branches, accounting for 45 percent of the industry’s branches in 2009.” Regarding the industry generally, there was a strong growth in deposits during the year. Deposits grew by 27 percent from GH¢7.6 billion in 2008 to GH¢9.5 billion. Between 2007 and 2008, the industry achieved only 10 percent growth. Source: BFT