Barclays Bank Profit Up By 35%
Barclays Bank Ghana has announced an increase of 35 percent in its profit before tax for 2011 from the previous year.
The profit is the highest to be recorded by the bank since it started operating in Ghana 95 year ago.
The Bank made public its financial status at a meeting with its key shareholders including customers, staff and board members and reported that its profit after tax went up from 85 million the previous year to 115 million in 2011.
Benjamin Dabrah, Managing Director of the bank told Journalists that the performance was boosted by prudent management practices of some variables such as cost and impairment.
Speaking in a hall where the bank had declared its first loss in Ghana about four year ago, Mr Debrah said the balance sheet of the Bank grew by 16 per cent from GH¢1.6 billion to GH¢1.9 billion.
The growth, he explained, came from investment in the real sector.
'The bulk of our growth came from three key areas', he said, mentioning loans and advances to individuals and companies, customer deposits and lending to other banks.
In the areas of loan and advances to the bank's customers, there was a 35 per cent growth.
'Contrary to what people say that banks are not lending, we actually grew our loans and advances by a third during 2011,' said the Barclays Managing Director.
There was also a 21 percent growth in customer deposit. 'This means that we mobilsied enough deposits from our customers which we gave back to the real sectors of the economy.'
Lending to other banks grew over 90 per cent. 'We can claim the loans and advances that others have done was facilitated by us because we lend them money to be able to do so.'
Mr Debrah stated that the bank is the largest local lender to the Ghana Cocoa Board and the entire cocoa industry in the country 'and we all know the important role that cocoa plays in the economy.'
Additionally, the bank advanced unsecured loans to over 30,000 individuals to enable them meet personal obligations such as school fees and rent among others.
Though there have been criticisms over high interest rates charged by commercial banks in the country even in a reducing base rate environment, the Managing Director of Barclays hinted that his bank offers the lowest interest rate. 'Barclays' average base rate including unsecured loans is around 21%. We are the first to reduce base rates when interest rates were coming down and still have the lowest on the market. So we are one of the banks that has reflected and passed on reducing interest rate to our customers.'
In spite of inflation, the bank's total cost of operation fell by 8 per cent from 114 million to 105 million while its interest income shrank by six per cent.
'As a business we are looking for more ways of being efficient so that we can pass on the saving to our customers,' said the Barclays MD after he described the year 2011 'as a water shed. We made the largest profit that we have ever recorded in our 95 years of operation in Ghana.
'It did not come from charging higher interest. It did not come from making more money from a smaller balance sheet. It came from prudent management of variables that are within our control.'
By Emelia Ennin Abbey