Standard Chartered Bank Ghana Limited made an underlying operating income of GH₵531m, up 2 percent over previous year; however, operating profit declined by 67 percent to GH₵91m.
Its results are below expectation relative to initial 2015 projections.
The year 2015 is on record in Ghana as one of the most challenging and exceptional years on many fronts.
The volatility experienced on global commodity and currency markets, coupled with Ghana’s macroeconomic headwinds and three consecutive years of an energy crisis, had a material adverse impact on business, said a statement released by the bank
“During 2015, we had to make very exceptional and unprecedented loan impairment provisions of GH₵213m, up 333% from in 2014, largely on account of the effects of a massive disruption to working capital cycles across almost all sectors in the Ghanaian economy.
Naturally the bank is as disappointed with the 2015 operating results as our stakeholders would be, due to the material deviation from our consistently good performance over the last decade.”
Commenting on the 2015 operating results, Chief Executive Officer of Standard Chartered Bank Ghana Limited, Kweku Bedu-Addo said: “The nature of these shocks in Ghana have been both cyclical and structural, and have persisted for the last three years.
We started picking up early warning signals in 2013, and the stressed operating environment unfortunately intensified over time.
“As expected, within difficult operating environments a lot of businesses would have stressed cashflow — which undermines debt-repayment capacity across most sectors in the economy.
Under prudential and regulatory guidelines we are obliged to take loan impairments on distressed assets.
What this means is that we will pursue a dual strategy of recovery and restructuring within the new cashflow realities.
“Fortunately, our decisions on profit retention in prior years since 2013 have given the bank a balance sheet that has been able to withstand the severe and unprecedented shocks to the business operating environment in Ghana.
This enables us to focus on achieving a quick rebound of the business as a more benign operating environment returns.
The focus for 2016 is to continue investing in technology, improve the customer experience, and introduce innovative products onto the market. We will deliver our medium-term strategy through disciplined execution and efficient cost-management.
“We remain proud of our record of consistently stellar operating results over an extended period of time, and we are confident we will restore the business to an attractive growth trajectory once more over the medium-term, in line with market expectations.”
Under the auspices of the Ghana Stock Exchange’s Facts Behind the Figures session, the bank will be engaging the investor community, analysts and financial media. The details will be circulated in the next few days
Source: B&FT Online