Commercial Bank Contributes for Development

Ghana Commercial Bank (GCB), the country's biggest commercial bank has so far contributed ?10.969 billion, towards the National Reconstruction Levy.

The National Reconstruction Levy was introduced in this year's budget to enable the government take a percentage of banks' profits for national development. Many banks initially sent warning signals that the tax would reduce their net profits and weaken their competitiveness.

By taking the bold step to pay the levy the management of GCB has showed the way for other banks.

This was made possible by the bank's impressive results for 2000 and the first two quarters of this year. Shares of GCB have increased form ?692 in June 2000 to ?798 as at June 30, 2001

The 15 percent increase in the price of GCB's shares was largely due to a huge profit before tax of ?109.7 billion for the half year ending, June 30, 2001.

The new profit is an increase of 25 percent over the 2000 half year-profit ?87.8 billion. A statement from GCB headquarters said the bank's total income rose from ?217 billion in June last year to ?396 billion.

The statement said in view of the impressive profit, GCB has declared an interim dividend of ?100 per share payable on October 29. The bank paid a dividend of ?250 and ?175 for the full year of 2000 and 1999 respectively.

The statement said asset turnover was maintained at similar efficiency, which increased the total assets to about 82 percent. Assets positioning contributed to the growth of interest income by 135 percent, while share of interest income to total income increased from 65 percent to 84 percent, thus minimizing negative impact on the income generating potential of the bank.

Consequently, the bank's net interest income increased by 115 percent from ?100,480 billion to ?216,034 billion .

According to the statement about half of the bank's interest income was from advances, indicating a gradual shift from the reliance on investment income. Commissions and fees increased by 32 percent from ?28.5 percent to ?37.6 billion from that of last year.