GCB Bank Plc has overtaken Ecobank Ghana Limited (EBG) as the biggest bank by assets in an alternating battle for the top spot that has seen the two institutions occupy the prestigious position equally over the past six years.
GCB Bank’s assets strengthened to GH¢18.26 billion in 2021 to surpass those of Ecobank, which ended the year at GH¢17.93 billion. Meanwhile, the growth in the assets was driven by treasury (T) bills and bonds, and loans and advances, among other things.
GCB Bank’s assets accounted for 10.7 percent of the banking sector’s total assets for 2021, whereas Ecobank’s assets were equivalent to 10.2 percent in the year under review. Absa Bank Ghana Limited (ABSA), Stanbic Bank Ghana (SBG), and Fidelity Bank Limited (FBL) are the next largest banks by assets in that order.
Drivers of Growth in Assets
The banking report established that the growth in the assets of the top five banks was driven largely by investment in liquid assets such as the government treasury bills and bonds, loans and advances, and improvements in cash balances financed by growth in liabilities such as deposits and borrowings.
The government securities increased by GH¢8.3 billion, loans and advances by GH¢2.7 billion, and cash assets by GH¢1.8 billion representing a growth of 30 percent, 10 percent, and 10 percent respectively.
Banks’ assets largely comprise loans and advances, investments, and cash and cash equivalents that the lenders directly deploy to generate interest income or related fee income. To a large extent, the size of the assets determines the leverage that a bank has when it comes to generating income and maximizing profit and efficiency.
GCB’s return to the top spot is the first since 2019 after it lost the position to Ecobank in that year. A largely indigenous bank, GCB Bank was the largest bank in the country for a long time until 2012 when Ecobank’s assets shot up tremendously after it successfully took over the now-defunct Trust Bank (TTB). Since then, the two banks have been neck to neck for the top spot.
GCB Bank’s takeover of the good assets and liabilities of the defunct UT and Capital Banks, however, strengthened its asset base.
Moreover, GCB, EBG, ABSA, SBG, and FBL maintained their positions as first-quartile banks with 46.5 percent of the industry’s total operating assets. Their total operating assets grew by 21.2 percent to GH¢74 billion compared to a 15.5 percent growth in 2020. FBL and ABSA significantly contributed to the 2021 increase in total operating assets. According to the report, Fidelity Bank recorded the highest growth of 45.5 percent to replace Consolidated Bank Ghana Limited (CBG) as the fifth bank in terms of operating assets.
ABSA, GCB, EBG, and SBG also increased their operating assets by 27.6 percent, 20.3 percent, 12.2 percent, and 8.7 percent respectively.
The second quartile consisted of Standard Chartered Bank Ghana Limited (SCB), CAL Bank Limited, Zenith Bank Ghana Limited (ZBL), Access Bank Ghana (ABG), and CBG, which is the latest entrant. However, the year-on-year growth in operating assets marginally declined from 20.9 percent in 2020 to 20 percent in 2021.
All banks increased their operating assets in 2021, giving the quartile, a total operating asset of GH¢44.4 billion. Although CBG held the largest operating assets in the group, it experienced the least growth during the year with 8.8 percent. CAL and SCB led the growth by increasing their operating assets by GH¢2.2 billion (30.2 percent) and GH¢2.1 billion (28.8 percent) respectively.
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