2007 was a successful year for GBTI and it exceeded its goals in most financial categories. In his report to shareholders for the annual general meeting scheduled for April 1, Chief Executive Officer Radhakrishna Sharma said total revenues for the year rose 16% to $3.2 billion, and this growth produced significantly higher profits. Profit after tax rose by 57% to $796 million. Earnings per share rose by 57% to $19.89 and the share price rose 28% during the year.
These results, he says in the company’s annual report which has been sent to shareholders continued the strong returns posted over the past four years, and from 2004 through 2007, earnings per share have grown at an annual rate of 40%, despite the challenges facing the economy and the competition.
Return on assets
The CEO says the improvement in net profit for 2007 resulted in an increase in the return on average assets from 1.50 percent in 2006 to 2.02 percent in 2007. Return on average equity improved to 20.01 percent for 2007 compared to the 14.56 percent in 2006, while earnings per share rose to $19.89 in 2007 from the $12.65 in 2006. The book value per share is now $107.59 compared to $91.22 in 2006.
The bank’s asset base, net of contra items, has grown by $7.28B or 20.2% for the year, compared to the increase of $4.8B or 15.6% in 2006. The share of commercial banks assets has grown from 19.8% at December 2006 to 20.4% at October 2007. The mix of assets at the end of the year was 40.7% Cash Resources; 29.6% Government-backed and other Primary Securities; 22.7%. Loans and Advances and 7% Fixed and Other Assets.
The bank’s deposit base grew by $6.IB or 19.4% for the year to $37.4B. This growth rate exceeds the 12.5% recorded in the banking sector at October 2007, Sharma said. The savings deposit category continues to record strong growth ($2.9B in 2007 versus $2.3B in 2006), given the rates of interest paid to customers.
Sharma said “local investments continue to be concentrated in Government Treasury Bills, the market for which remains extremely competitive given the high liquidity in the commercial banking system. We continue to maintain a portfolio of foreign securities and cash deposits as part of our objective to establish a flexible and stable financial structure by considering risk returns and yield differentials. Our investment in securities is guided by the investment policy under the guidance of an Investment Committee.”
The bank’s loan portfolio at the end of the year stood at $11.2B, reflecting a net growth of $1.4B (14.5%) over Dec. 2006. New loans for the year totaled in excess of $3B with facilities over $100M being granted to customers in the pharmaceuticals, hotel, fishing and distribution sectors. A review at year end, shows performing accounts amounting to $9.7B or 87% of the portfolio, the CEO said. Total non-performing accounts at December 2007 stood at $1.5B and were 13% of total loans compared to 13% at the end of 2006.
A sectoral analysis of the portfolio shows that the distribution sub-sector accounts for $2.9B (26%), the rice sector for $1.6B (14%) and the housing and construction sectors each with $ 1 .OB (9%). The major area of decline in the portfolio over 2006 occurred in the timber and sawmilling sector by $200M. The bank’s share of total commercial bank lending has remained unchanged at 22% over the past twelve months.
