Prudential Bank asset value for Q1 2021 amounted to Ghs 4.05 billion.
This an increment of Ghs 940 million as against the Ghs 3.11 billion asset value recorded in Q1 2020.
Growth in assets value as noted by norvanreports in its examination of Prudential Bank’s Unaudited Financial Statement for Q1 2021, was mainly driven by increased investment securities and cash and cash equivalents.
Investment securities rose in value from Ghs 689,324 to Ghs 1,117,060 in Q1 2020 and Q1 2021 respectively.
Cash and cash equivalents also rose from Ghs 397,023 to Ghs 924,731 in Q1 2020 and Q1 2021.
Posted liabilities for Q1 2021 also amounted to Ghs 3.38 billion. Compared to the same period last year – Q1 2020 liabilities of Ghs 2.47 billion – total liabilities increased by some Ghs 907 million.
Growth in liabilities was mainly driven by the over Ghs 2.59 billion deposits made by customers of the bank.
Liabilities in the banking sector is often viewed as an ‘asset’ and not debt due to the fact that a major component of a bank’s liabilities are deposits made by customers which the bank can in turn use for credit creation by lending the monies out other customers as loans.
Prudential Bank at the end of the first quarter of 2021, made a profit-after-tax of Ghs 16,568. Recorded profit-after-tax for the same period last year was Ghs 11,280.
The year-on-year growth in the bank’s profit-after-tax was on the account of increased net interest and operating incomes.
However, the bank’s Non-Performing Loans (NPLs) reached 16.64 percentage points of gross loans made by the end of March 2021.
The posted NPL of 16.64 percent at the end of Q1 2021, represents a year-on-year (yoy) increment of 7.79 percentage points when compared to the posted 8.85 percent NPL in Q1 2020.
The rise in the bank’s NPLs indicates a retrogression in its loan asset quality. This implies that bad loans for the period under review increased.
Increment in the bank’s bad loans or NPLs can be mainly attributed to the Covid-19 pandemic as individuals who had borrowed monies from the bank in the previous year -2019- could not pay back in 2020 due to the ravaging effects of the pandemic on businesses and households.
In terms of Capital Adequacy Ratio (CAR), Prudential Bank recorded no significant changes in its CAR.
The adequacy ratio of the bank hovered around 18 percent for the period between Q1 2020 and Q1 2021.
The bank’s 18.6 percent CAR for Q1 2021, is 5.6 percentage points above the 13 percent CAR regulatory requirement of the Bank of Ghana (BoG).