Ghana Commercial Bank (GCB), the shoulder to lean on
By Gideon Sackitey, Ghanadot

March 23, 2007

Currently running on our radio stations through out the country is an advert about a woman who discovered that the major surgery she is about to have is to be done by an experienced doctor, who is actually doing surgery that for the first time!

Thus, just as you will not entrust your life to an inexperienced doctor who most possibly will kill you or jeopardize your life, you most probably will want to have a bank that will not run you and your lifetime investments aground.

Remember, I meant a good bank that has a reputation and a track record. One that is capable of braving the storm on every occasion and coming out clean and strong. GHANA COMMERCIAL BANK (GCB) previously known as Bank of the Gold Coast, stands out to that test. Just take a look.

Born in May 25, 1953, the main objective of GCB then and still is, was to provide special attention to indigenous Ghanaian traders, businessmen and women and farmers especially who sadly could not obtain financial support from Standard Chartered Bank and Barclays Bank then known as Barclays Dominion Colonial and Overseas Bank.

Indeed, in those heady days, it was the view of many that GCB would soon fold up and in plain terms die; that it would not survive the huge competition from those two experienced expatriate banks with immense capital base and home support that transcended territories across the world.

But truth be told, from humble beginnings Ghana Commercial Bank has grown to become that household name that we meet every step of the way! First, from a 28th February Road office, it spread into every region, district and then onto overseas addresses, first in London and then Togo in 1959 and 1970 respectively.

The Bank showed consistency and tenacity in prudent management over the years that by its 10th Anniversary it had established 47 branches. By 1963 when GCB was celebrating its 20th Anniversary, it had risen to 97 branches and 14 agencies signifying that growth and dynamism was always part of the banks’ agenda of sustainability. Today, it is the Bank with the most branches in Ghana with as many as 133 branches in every nook and cranny serving the needs of indigenous business on each market day across the country.

By this time, GCB had begun to play such great roles such as financing Ghana’s growing trade portfolio such as the agricultural sector, timber, cocoa, crude oil, cotton, rice and shallot farmers among others.

President John Agyekum Kufuor in his congratulatory message at the 50th anniversary celebrations singled it out as not having the widest network, “but the bank that goes out there and stays where other banks would not go. It is the Bank that continues to demonstrate a commitment to national development and exercise a social conscience in the conduct of business.

He was most appreciative that, “the Bank has always assisted government in expanding and opening up the country for development, sometimes without dwelling to much on profit considerations”.

The Bank has come a long way playing that unique mother role of all shades of clients that makes it stand out as that big hand lending support to all in national development. With its strong branch network in all the 10 regions and 130 districts, GCB has a hand in almost every single project in each region of the country, depicting its true national character.

The Bank in actual fact did put out funds to crucial crude oil financing single-handedly for a decade, when no bank would show its face for fear of making a loss. One such was a syndication of a loan of 96 million dollars with its partners Messers ANZ Bank of Germany for the Ghana National Petroleum Corporation in 1992.

Investors looking at Ghana’s abundant natural resource potential beyond the comforts of the capital and its environs, usually have been starved of capital to do their business, and exploit positively the natural resources have had the support and reliability of GCB in every place when most banks dread sustaining branches in many of these areas.

From humble staff strength of 27, the bank currently boasts of about 2,143 staff members and verily I say this number is rising and would sooner than later hit a higher number if strategic plans and programmes take shape to turn the Bank into that world class player in international financing.

On the occasion of its Silver Jubilee in 1978, the Bank reaffirmed its commitment to development of all aspects of the national economy, paying special attention to the needs of he Ghanaian farmer, artisans, businessmen and women as well as industrialists with the constraints of the national economy. A close examination of GCB’s books show significant inroads into all sectors by 2002 with the Development Finance Unit leading the way.

According to Professor Kwadwo Asenso-Okyere, the immediate-past Vice-Chancellor of the University of Ghana Legon who spoke at the anniversary lectures, the banks loan portfolio has began to relate to the Ghana Poverty Reduction Strategy in terms of production and processing, infrastructure development through construction.

“Assistance in the construction sub-sector includes the provision of performance bonds, advanced payments and mobilization guarantees, working capital and equipment loans to the contractors ……involved in routine and periodic maintenance of roads.

“In 1998 alone, a total of 11,549 kilometres of trunk road were maintained and rehabilitated. In the same year medium and small span bridges were completed nationwide, all with the support of GCB,” he said.

Lets not forget that the bank has been involved in housing provision and developed a mortgage arrangement under which it provided long term loans for residential and commercial housing in the first two decades of its life. The last units of the housing programme were disposed of in 1996 when the bank was preparing to go public. Indeed, GCB was one of the banks that participated in raising funds for the construction of the Kaneshie Market.

The Bank emerged as the best performing equity on the Ghana Stock Exchange n 2002, registering a total return of 153 per cent made up of 124 per cent in capital gains and 29 per cent income yield. This is in comparison to the 45 oer cent average yield of gains on the market.

Today, 50 years on, notwithstanding the arrival of the new industry entrants, GCB stands tall, as one of, if not the leading bank in the country in terms of balance sheet size, branch network, and its capacity of deposit mobilization.

As stated, the bank has been on a tide for several years since its inception posting tremendous results over the period. From a net profit of 16,000 cedis in 1953, and 3,919,000 in 1973, GCB’s profit after tax in 2002 had shot up to 281.908 billion cedis cedis of which 107.536 went into the national reconstruction levy and corporate tax.

Since then he Bank has moved on with net income rising from 598.4 billion cedis in 2004 to 700.8 billion in 2005 recording a 102.4 billion cedis or 17.1 per cent hike. Operating expenses for the Bank increased from 506.4 billion cedis to 729.3 billion cedis in 2005. Significantly, bad and doubtful debts decreased by 24.9 billion cedis to 73.5 billion cedis.

Total assets increased by 283.2 billion cedis, about 5 per cent during 2004 to 5,890.2 billion largely due to the close attention of lending to treasured clients wit total deposits fixing at 4,265.7 billion cedis in 2004 to 4.729.9 billion cedis in 2005.

Following this remarkable trend, GCB shareholders will be laughing all the way to the bank soon with the expected release of the 2006 results at their Annual General Meeting on March 30th, 2007. According to insiders, a dividend of 550 cedis per share, which amounts to 90.8 billion cedis representing a 35.5 per cent of profit after tax and 37.5 per cent above that of 2005.

GCB over the years has developed strategic plans to not only remain competitive, but alive to its core responsibilities. For instance in 1996, the Bank successfully transformed itself from a fully state-owned, incorporated bank into a limited liability bank, with substantial private participation and finally listing on the Ghana Stock Exchange where it has put up quite a sterling performance usually rating within the best five by volume and value.

With product innovation, GCB has remained innovative, launching new products such as the Mondex Card, FODEM Account for foreign resident Ghanaians and investors, Commernet (PC-based banking), in line with the new wave of modernisation in the banking industry. Consequently, by technology standards, one can conveniently say that GCB is abreast of the competition, while keeping its lead as a Ghanaian bank, way ahead of its competition by reach.

With the enormous responsibility it has been charged with, GCB has grown in profitability and size and to date has been able to provide good customer service and reasonable dividends for its shareholders.

On the occasion of the 50th anniversary of the bank some few years back, the then deputy governor of the Central Bank, Mr Emmanuel Asiedu-Mante been so enthused could not help but commend the bank for doing all these and yet remaining profitable and in the forefront of banking operations in Ghana.

Gideon Sackitey, Ghanadot, March 23, 2007