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Minister of Finance Ken Ofori-Atta
Ghana’s pioneer and lead commercial bank, the GCB Bank Limited, has made history by showcasing to the banking and finance community in Ghana that government’s restructuring of the sector was no fluke and no mistake.
According to official reports, the bank posted over GHC610 million profit before tax for the year 2020.
Considering that the feat was accomplished under a COVID economy, one cannot but commend the board and management of the bank for the brilliant effort they put in to attain that target.
Implications
The ripples of that accomplishment are huge because of where GBC Bank has come from as a typical state bank, known to be overly cautious in its risk management style and profile.
That is aside of the fact that state-owned banks have the record of performing averagely, instead of leading the pack. Indeed, where previously institutions like Barclays and Stanchart had shown finesse, state banks, which had presence everywhere, got wobblier by the day. That resulted in poorer and poorer performance, as the Prudentials and Zeniths and Fidelitys attracted all the movers and shakers in business.
But the performance of GCB Bank is relevant because it means that depositors now have evidence about where they may invest their monies and go to sleep, without being told the next morning that their monies went out and never returned.
It also means that there are still credible businesses in town which deserve support. Additionally, it means that the bank is not abusing government’s supported extended to it.
Finally, we may deduce that in conducting business, GCB Bank did not fail to adhere to the guidelines that had been set out for the sector by the Bank of Ghana.
Projections
While it is early days yet to predict how the other banks would fare, it is fair to predict that the trend would be positive. This means that in implementing the banking sector reforms, government was not playing politics or attacking directors of banks who belonged to the “other side”, as had been propagated by a section of the political community.
With this, we can be assured that the sector would see growth. That may also mean that government would have been justified in taking that decision, unless of course those banks that were caught in the reform deliberately decided to go under to prove how inefficient their managements were.
Ripples
The refreshing news is also likely to result in a marginal diminishing of our informal economy sector as government rolls out its digitisation programmes aimed at bringing the activities of our teeming small and medium scale business entities into the open.
With our development partners, including the World Bank and IMF, certain that we have put in place resilient structures that should facilitate growth, we may equally be sure that the net effect of the banking sector reforms would manifest positively in the strength of the cedi and in substantial job creation by the end of the year.
Kudos
As we would admit, protecting and harnessing our natural resources for collective, national benefit would be the next national duty. This duty would take us to the next level as a serious, responsible nation, committed to attaining its developmental goals as a leader not only in the sub-region, but also as a leader on the continent.
While we again commend the GCB Bank, we also hope that the other banks would emulate the example that the ‘old lady’ has set and prove that its directors are serious and their institutions ready to be part of the national transformational agenda.