Ghana Commercial Bank’s Profit Falls on Loan Losses

By Emily Bowers

(Bloomberg) — Ghana Commercial Bank Ltd., the nation’s biggest lender by branches, said its annual profit halved as loan losses from money owed to it by a state oil refinery increased.

Net income for the year ending Dec. 31 was 18.8 million cedis ($13.3 million) compared with 37.6 million cedis a year earlier, the Accra-based bank said in its annual report published on its Web site.

“The reduction in profit after tax was due to the relatively higher provision made against loans and advances in the downstream petroleum sector,” board Chairman Pryce Kojo Thompson said in the report.

Ghana Commercial Bank finances the state-owned Tema Oil Refinery, the country’s only oil refinery. In September, the government appointed a team to work out how to repay the estimated 900 million cedis of debt the refinery owes to the bank.

Impairment loss on loans and advances rose to 36.7 million cedis from 8.8 million cedis the year earlier, the bank said. Net interest income, the money the bank earns from lending, fell to 131.7 million cedis from 132 million cedis.

In 2009, the bank opened nine new branches, widening its network to 157, according to the report.

–Editors: Antony Sguazzin, Alastair Reed.