CBG records GHS 2bn losses; CAR declines to -4.5% in 2022

State-owned bank Consolidated Bank Ghana (CBG), for the 2022 review period recorded net losses of GHS 2bn.

The GHS 2bn losses compares against the GHS 72m profit recorded same period in 2021.

Losses incurred by the bank was largely on the account of the government’s domestic debt exchange programme which saw the government re-structure the principals, coupons and maturity dates on bonds held by the bank.

Assets value of the bank within the review period declined marginally from GHS 10.7bn to GHS 10.6bn. Value of the bank’s investment securities fell from GHS 6.7bn to GHS 6.1bn in the period under review.

In contrast, liabilities of the bank grew from GHS 9.9bn to GHS 11.3bn driven largely by increments in deposits from customers which amounted to GHS 7.8bn at end-2022.

Capital Adequacy Ratio (CAR) of the bank witnessed a significant fall from 21.64% in 2021 to -4.5% in 2022.

This implies that the bank will not be able to absorb potential or unexpected losses should they arise. It also means that the bank has no capital set aside to be used to offset losses and protect deposits of customers.

Given the negative CAR of the bank, additional funding needs to be injected into the bank to make it financially stable.

Loan asset quality of the bank also within the review period worsened as its non-performing loans rose from 0.71% in 2021 to 19.34% in 2022, implying that CBG now has more unpaid loans than it previously had a year ago.