StanChart reports profit of GH¢437mn in 2021

Standard Chartered Bank (SCB) recorded a post-tax profit of GH¢437 million for the 2021 fiscal year – a 9 percent dip from the previous year, according to its recently-released audited financial statement for the period.

Despite growing its operating income by 4.7 percent year-on-year (YoY) to close the year at GH¢1.07 billion, fueled by a corresponding 3 percent growth in interest income to hit GH¢809 million, the lender saw its operating expense for the period shoot up by 32.5 percent to reach GH¢381.7 million.

SCB’s total assets value breached the GH¢10 billion mark, a 26 percent jump from the GH¢8.03 billion recorded in 2020. This happened on the back of growth in cash and cash equivalents (17.6 percent), loans to other banks (1,508 percent), loans and advances to customers (11.27 percent), and investment securities (55.5 percent).

The bank also witnessed a surge in deposits from customers totaling GH¢7.55 billion. This represented a 31.4 percent appreciation over the GH¢5.75 billion recorded in 2020. The Ghana Stock Exchange-listed (GSE) lender also grew its Capital Adequacy Ratio (CAR) by 8.52 percentage points, ending the year with a CAR of 33.42 percent.

The bank’s asset quality remained stable as its non-performing loan ratio (NPL) remained unchanged at 23 percent, this was however higher than the industry average of 15 percent. Its liquid ratio – the measure of its ability to pay debt obligations and its margin of safety – also inched up by 5.36 percentage points to end the year at 71.05 percent.

Commenting on the performance, Databank in its note to investors commended SCB for the double-digit growth in its loan book, despite a subdued performance in the final quarter of the year in focus.

“Although the bank’s fourth-quarter profit after tax significantly underperformed our forecast, the strong interest income growth led by the credit portfolio expansion is commendable. We were impressed to see loan book growth recover as the bank softened its conservative stance on lending,” Databank stated.

“The decline in trading income was not surprising given the tightening of spreads on the fixed income market in 2H21, which left little room for market participants to grow trading income. However, we expect trading income to witness recovery as spreads widen and demand for fixed-income securities strengthens due to attractive yields,” Databank added.

The Accra bourse-listed bank saw its ordinary shares end the year at GH¢20.30 and its preferential shares (SCBPREF) at GH¢0.90, a 3.45 percent appreciation for the period.