Despite the expected strong business volume growth in the last quarter, Ghana Commercial Bank is expecting a relatively slower pace of revenue growth due to prospects of a decrease in operating margins.
Operating margins have been on the decline in line with the general reduction in money market rates and from short term shifts in the portfolio.
"Our expectation of an improved overall performance for 2010 is unchanged. We expect the interest rate easing cycle to continue albeit at a slower pace as efforts are made to stimulate the economy," Mr Simon Dornoo, Managing Director said at a briefing on the company's earning results for the nine months to September.
The bank reported a net profit up 8.14 per cent to GH�35.83 million from GH�33.13 million, a year ago.
Net interest income also jumped 80.3 per cent to GH�219.88, compared to GH�121.90 million, a year ago.
Mr Dornoo said a combination of strong revenue growth and relatively slower cost and impairment growth resulted in an overall improvement in operating profitability.
Revenues for the period to September 2010 were GH�251.4 million versus GH�169.9 million for the same period last year, representing a growth of 48 per cent.
"Underlying cost trends points to a slower cost run rate and we do not expect further increases in impairment losses for the rest of the year," he said.
Mr Dornoo said the impairments were in line with expectations as they were held relatively flat during the quarter.
This resulted in an annualised impairment charge of nine per cent compared to 14 per cent as at June 2010.
He said the improvement reflected the increased focus on upgrading the quality of the loan book.
Loans to customers decreased by 18 per cent to
GH�1 billion in line with the bank's strategy to re-balance the loan portfolio over the medium term and the bank expects further reduction in the size of the loan portfolio as government make repayments of the remainder of the Tema Oil Refinery debt.
The Bank's total assets increased by four per cent to GH�1.99 billion, driven by a 12 percent growth in customer deposits to GH�1.41 billion.
The growth in deposits came from current and savings account products, which increased by 13 per cent over the period.