The fastest-growing bank, OmniBSIC Bank, has emerged stronger in the aftermath of the debt restructuring program, with an impressive performance that resulted in one of the biggest profitability ratios in the banking sector last year.
The bank’s profit rose by 218 percent to GH¢150.6 million in 2023, indicating a significant turnaround from the loss suffered in the previous year.
It also ended the year with a strong balance sheet as total assets rose by 86 percent in 2022 to GH¢5.7 billion last year.
An analysis of the Bank’s financial statement released last week showed that the bank is more profitable, liquid, well-capitalized, and deploys its assets efficiently.
DDEP Challenge
OmniBSIC Bank posted its maiden profit of GH¢8.69 million in the first quarter of 2022 after ending a loss streak since its takeoff in 2019. It has since remained profitable, posting impressive results quarter after quarter.
That profitable run was, however, hampered by the domestic debt exchange program (DDEP) that deteriorated the non-performing loans (NPLs) of the banking sector, resulting in the creation of GH¢20.8 billion and GH¢4.33 billion new bad loans for banks in 2022 and 2023 respectively.
‘Critical turnaround’
In 2022, OmniBSIC Bank recorded a GH¢127.5 million loss on account of the large impairments resulting from DDEP.
Its 2023 financial statements, however, showed a turnaround, with all revenue lines enjoying strong growth rates.
The Managing Director of OmniBSIC, Mr. Daniel Asiedu, said “this is a critical turnaround” in the strive to reposition the bank as a preferred lender for businesses and households.
He said the stellar performance was the result of hard work and renewed commitment from staff to serve customers better, earn their trust, and help grow their businesses.
“The customer is at the center of our turnaround story, and everything we do here is geared towards helping make life and business better for the customer,” Mr. Asiedu, who is also the Chairman of the International Presbytery of Fountain Gate Chapel (FGC), said.
“When we succeed at that, we will get more business and our bottom line will be good as you are seeing,” he added.
Gross earnings
The bank’s financial statement showed that last year’s record-high profit was driven by a perfect mix of strong growth in interest income and well-managed expenditures.
Gross earnings rose by 114 percent in 2022 to GH¢920 million while operating income more than doubled – from GH¢206 million in 2022 to GH¢534 million in the period under review.
The Managing Director said the decision to improve operational efficiency paid off, with the cost-to-income ratio dropping from 90 percent in 2022 to 60 percent last year.
“It is key because as we grow the revenues, we also need to watch the expenses. To grow, you need to incur costs that fuel growth, and we are happy that it is reflecting in the statements,” the astute banker said.
Strong deposits
Further analysis of the financial statements showed that the strong balance sheet for the period was funded by significant growth in customer deposits.
After ending 2022 at GH¢2.5 billion, the results showed that customer deposits rose by 93 percent to about GH¢4.9 billion.
The bank was also well-capitalized, with its capital adequacy ratio (CAR) ending the year at 22.5 percent – almost double the regulatory requirement of 13 percent.
It further showed that the Bank has increased the assets that deliver earning to it.
OmniBSIC’s earning assets rose by 105 percent in 2022 to GH¢4.3 billion in 2023 while its return on equity (ROE), which measures a bank’s profitability and how it efficiently deploys its assets, improved from a negative 47 percent in 2022 to positive 26 percent in the year under review.
Looking ahead
The Managing Director of OmniBSIC Bank noted that the turnaround was a strong inspiration for the staff and management to work hard to exceed customer expectations.
He commended the board and staff for their dedication and assured the public that the bank was always ready to meet their financial needs. He said the bank was revamping its infrastructure and empowering staff to deliver higher value to customers.
Mr. Asiedu took over the reins of OmniBSIC in May 2021 with a goal to align with the bank’s vision to be the number one bank in customer service delivery and value creation for stakeholders.
It has since reinforced its corporate governance structures and invested in infrastructure in line with the central bank’s corporate governance and other regulatory directives.
“We now aim to step up on the good things and work closely with our customers to grow their businesses. Our message to you, our cherished customers, is give us a chance to serve you, for we see a brighter future ahead together,” Mr. Asiedu said.
