Banking stocks: Stanchart, Cal register improved earnings

Good times await the investing public as listed banks that have so far released their full year 2019 financial statement indicate a growth in their earnings.

The Financial Stock Index suffered a setback in 2019 because of largely financial sector reforms undertook by the Bank of Ghana.

But so far earnings of the listed banks and non-listed banks have been exciting.

Primarily the banks cash on the increased stated capital, registering income from investment in securities (Treasury bills and Government of Ghana Bonds).

According to the 2019 full year financial result of Stanchart, profit went up 33% to GHS281 million.

This culminated in an increase in basic earnings from GHS1.54 per share in 2018 to GHS2.08 in 2019.

The bank’s income lines (interest income, fees and commissions and trading income) grew by 21.4 and 23%.

In terms of the financial soundness indicators, capital adequacy ratio stood at 27.53 percent in 2019, down from 28.59 percent in 2018. Liquidity ratio dropped from 84.79 to 74.73%

Non-performing loans reduced from 25.16% in 2018 to 17.20% in 2019.

For Cal Bank, earnings went up 6.9% to GHS174 million in 2019.

Interest income went up from GHS415.9 million in 2018 to GHS516.3 million in 2019.

Net fees and commissions of the indigenous, however, decreased from GHS69 million in 2018 to GHS39.5m in 2018.

In the contrast, cost-to-income ratio was very high at 58%.

Regarding the stability of the bank, capital adequacy ratio stood at 22.5% in 2019, down 0.2% from 2018.

The bank had one of the highest liquidity ratio in the industry of 142% in 2019, as against 143% in 2018.

NPLs remained low at 9.9% in 2019, same as 2018.


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