Digital Banking and Financial Performance Review
PBT Trend
The Group's Gross Earnings increased by 20.4% to #539.2bn in FY-2022 from #447.8bn in FY-2021 driven by the growth
recorded on the Funded and Non-Funded Income lines. Interest earnings grew by 21.9% from the twin impact of growth
in Earnings Asset volume and yield (8.53% in FY-2022 from 8.05% in FY-2021). Growth in volumes by #444.0bn (#2.879tn
vs #2.435tn) underpinned by improved funding.
The 21.9% growth in Interest Income (#325.4bn vs #266.9bn) was further complemented by the 18.2% growth posted on
Non-Funded Income (#213.8bn vs #180.9bn). Non-Funded Income (NFI) comprising Fees and Commission Income
(42.4% growth), Other Income (38.8% growth), and Trading Income (18.8% growth).
■ Net Interest Income is up y-o-y by 17.5% (#259.3bn vs #220.6bn) as the 21.9% increase recorded on the interest income
line easily offset the 42.8% increase in Interest Expense (#66.1bn vs #46.3bn). The growth in Interest Expense was driven
by the 71.0% increase in interest paid on time deposits (#27.6bn vs #16.1bn), as customers demanded more interest on
their deposits. The growth in interest Expense also led to an increase in the cost of funds from 0.88% in FY-2021 to 1.24%
in FY-2022. Rising Inflation and an increase in MPR by the Central Bank contributed significantly to the pick-up in the
cost profile.
Loan Impairment charge increased by 41% to 11.985bn in FY-2022 from #8.531bn in FY-2021 due to an increase in the
probability of default generated by the predictive ECL impairment model from the macroeconomic data inputs,
necessitating a need for an increase in the allowance for impairment in spite of the level of risks reserves already in
place and loan quality.
The impairment recorded by the Group as a result of investment in Ghanaian Sovereign Securities has been discussed
earlier in the presentation.
. The combination of high Inflation and a devaluing currency led to an increase in operating cost, with significant
increases in the amount expended on diesel, fuel, electricity tariffs, ground rate, coms exp., repairs and maintenance,
aside from Increased regulatory cost in the form of Amcon Levy and NDIC (increase Amcon and NDIC levies
calculated on the basis of growth in prior year's Total Assets plus Contingents and Deposit Liabilities). The growth in
Opex by 21.6% outweighed the 16.5% increase in Operating Income leading to a pick up in Cost-to-Income ratio to
48.0% in FY-2022 from 42.3% in FY-2021.
Overall, the Group benefited from the effective utilisation of its strategic, core and foundational capabilities; changing
and adapting quickly to make the best use of opportunities and deal with challenges. However, its performance was
significantly hindered by the #35.6bn Impairment on the Ghanaian Sovereign Securities leading to a 3% drop in
FY-2022 PBT to #214.2bn from #221.5bn in FY-2021.
As the Financial Holding Company continues to gain traction, we expect the revenue streams to become stronger and
further diversified to withstand further stresses. We also expect income from Non-Banking Subsidiaries (i.e., Payments,
PFA, and Asset Management) to strengthen and account for 2-3% of the Group's performance by FY-2024.
PBT (#'Bn)
215.59
231.71
238.1
221.5
214.2
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Return on Average Assets & Equity
30.90%
31.16%
26.83%
20.60%
18.65%
5.56%
5.59%
4.63%
3.37%
2.85%
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
ROAA ROAE
* Pre-tax profit expressed due to impact of Finance Act and expiration of CIT Exemption Order 2011 on tax
19View entire presentation