Absa, Ecobank biggest earners in first quarter profits

A Business24 analysis of data on banks’ profitability in the first quarter of the year shows the top-10 banks bagged a combined GH¢843m in after-tax earnings.

Absa Ghana was the biggest earner with GH¢130m in profit for the period, followed by Ecobank Ghana with GH¢118m, Standard Chartered with GH¢109m, GCB Bank with GH¢92m, and Stanbic with GH¢73m.

These big-five earners commanded GH¢522m in post-tax profits for the period.

Other banks making up the top-10 earners were Access Bank with GH¢68m; Guaranty Trust Bank with GH¢67m; Fidelity Bank with GH¢68m; Zenith Bank with GH¢63m; and UBA Ghana with GH¢55m.

ABSA’s strong profit growth was on the back of a 23 percent growth in interest income, driven mainly by the growth in the bank’s earning assets from GH¢7.98bn in the first quarter of 2019 to GH?9.53bn in March 2020.

Ecobank Ghana saw its gross earnings increase by 34 percent from GH¢355m to GH¢476m, spurred by a 44 percent growth in interest income from GH¢246.8m in the first quarter of 2019 to GH¢355m in the first quarter of 2020.

Apart from profit, the top-10 banks collectively mobilised GH¢55bn in deposits from customers, with Ecobank and GCB recording the highest figures of GH¢10bn and GH¢9.5bn respectively.

The figure was a 22 percent increase over the GH¢45bn that was mobilised by the same banks in the same period of 2019.

The data also showed that the big-five earners dished out the most loans to their clients and customers, amounting to GH¢18.4bn as at March 2020.

The remarkable performance of these banks, which likely represents an industry-wide trend, shows that the country’s financial sector could brave the curse of the coronavirus pandemic, unlike other critical sectors currently on their knees as the pandemic’s ramifications continue to be felt.

The data further suggest that banks’ recovery from the financial sector clean-up continued into the first three months of the year despite Covid-19 showing up in the last month of the quarter.

An earlier analysis by Business24 of banks’ overall performance for the year 2019 had shown significant growth in all the key indicators, signalling the robustness and resilience of an industry that has undergone extensive “cleansing”.

According to the Bank of Ghana in its monetary policy press statement on May 15, although the pandemic has curbed loan growth and increased loan losses, “the latest stress tests conducted in April 2020 suggest that banks are strong and resilient and are well-positioned to withstand mild to moderate liquidity and credit shocks on the basis of strong capital buffers and high liquidity positions.”