The state-owned Ghana Commercial Bank (GCB) terminated the appointment of 251 employees last year to reposition itself in the industry.

An annual report, which was issued by the bank for the last fiscal year, revealed that total benefits paid to the affected employees amounted to GH¢4,521,708 compared to GH¢9,382,240 paid in 2008. GCB also experienced a whopping 50 percent drop in profit in 2009 compared to the previous year.

Profit after tax stood at GH¢18.8 million which was 50 percent below the 2008 figure of GH¢37.6 million.

The Board Chairman of GCB, Pryce Kojo Thompson, told shareholders in Accra last Friday that the dip in profit was largely due to the indebtedness of the Tema Oil Refinery (TOR).“The reduction in profit-after-tax was due largely to the relatively higher provision made against loans and advances to companies in the downstream oil sector.

Abnormal increase in the international prices of crude oil and refined petroleum products in 2009 presented serious challenges to the country’s downstream oil sector.

Traditionally, your bank (GCB) has been the main financier to the country’s oil sector, especially TOR.

“Despite the reduced profits, the board still deems it fit to propose a dividend of GHp3.56 per share, amounting to GH¢9.4 million compared with GH¢15.9 million in the previous year,” the statement said.

TOR’s debt is estimated to range somewhere between 600 and GH¢900 million. The percentage of non-performing loans to gross loans and advances stood at 19 percent, significantly higher than the previous year’s figure of 2 percent.

The bank’s net operating income also declined from the previous year’s figure by some seven percent to GH¢165.5 million. Total operating expenses however went up by 18 percent to GH¢140.7 million. Although the bank is still licking its wounds over the loss, Mr Thompson said there would be better times.

“The prospects for growth of the Ghanaian economy are bright despite the challenges in the international economy.

This is buttressed by the economic stabilization and growth agenda set by the government, coupled with the imminent commercial production of oil in the latter part of the year,” Mr Thompson said.

Meanwhile, the Ministry of Finance is negotiating final terms of a debt restructuring facility to save the TOR.

The restructuring would also ensure that TOR’s indebtedness to the GCB is cleared.

Also contained in the financial statement is the gross loans and advances of the bank which increased to GH¢1,319 million as at the end of December, 2009 from GH¢1,103.8 million in 2008, representing a rise of 19.5 percent.The significant increase was attributed to increases in overdrafts and term loans, particularly to the petroleum sector.

Its interest income increased from GH¢ 181.7 million in 2008 to GH¢ 266.0 million in 2009, representing a growth of GH¢ 84.3 or 46.4 per cent.

The bank was able to achieve this feat as a result of competitive pricing of its assets due to higher outstanding exposure to the petroleum sector as well as its ability to introduce innovative products and services onto the market.

Shareholders’ funds stood at GH¢ 207.7 million as at the end of 2008, but declined to GH¢ 203.4 million in 2009, registering a drop of GH¢4.3 million or 2.1 percent. The total assets of GCB rose to GH¢1,922.7 million in 2009 from GH¢1,650.2 million in 2008, representing a growth of GH¢272.0 million or 16.5 percent.

Total deposits of the bank increased from GH¢1,030.1 million to GH¢1,259.5 million in 2009, representing a growth of GH¢229.4 million or 22.3 percent.

As a responsible corporate citizen, the bank allocates a reasonable amount of funds annually to support critical areas of the Ghanaian society such as education, health, sports and the environment. The bank committed GH¢3 million in 2009 to attain these objectives.