UBA Ghana increases CAR ratio to 24.9%
United Bank of Africa (Ghana), for the period ended June 2021, increased its Capital Adequacy Ratio (CAR) by 3.35 percentage points.
UBA Ghana’s CAR as at end-June 2021, stood at 24.9 percentage points up from the 21.59 percentage points recorded same period last year.
The bank’s CAR ratio is well above both the banking industry’s CAR of 20 percent and the Bank of Ghana’s 13 percent regulatory requirement.
With a CAR of 24.9 percent, this means UBA Ghana has enough capital to absorb potential losses incurred due to bad loans.
It also means that the bank is highly unlikely to become insolvent and very capable of protecting depositors’ monies.
The capital adequacy ratio (CAR) is a measurement of a bank’s available capital expressed as a percentage of a bank’s risk-weighted assets and liabilities.
Capital Adequacy Ratios mandate that a certain amount of the deposits be kept aside whenever a loan is being made. These deposits are kept aside as provisions to cover up the losses in case the loan goes bad.
Assets value of UBA Ghana as at the end of the second quarter of this year per its Q2 2021 Unaudited Financial Statement, amounted to Ghs 4.69 billion.
An increase of some Ghs 1.31 billion on a year-on-year basis from the posted Ghs 3.38 billion total assets value at Q2 2020.
A perusal of the bank’s financial statement by norvanreports indicates that the rise in the bank’s assets value for the review period was on the account of an increase in UBA Ghana’s cash and cash balances and investment securities.
Cash and cash balances grew from Ghs 754 million in Q2 2020 to Ghs 1.16 billion in Q2 2021.
The value of the bank’s investment securities also grew from Ghs 1.18 billion in Q2 2020 to Ghs 2.03 billion in Q2 2021.
The bank’s total liabilities also for the review period increased from Ghs 2.45 billion in Q2 2020 to Ghs 3.62 billion in Q2 2021.
The bank’s liabilities were mainly driven by deposits from customers which grew from Ghs 2.35 billion in Q2 2020 to Ghs 3.52 billion in Q2 2021.
With regards to profit, the total recorded profit after tax at end-Q2 2021 stood at Ghs 82 million.
The posted profit for Q2 2021, marks a reduction in the bank’s profit by some Ghs 11 million when compared to the Ghs 93 million profit recorded for Q2 2020.
The reduction in the bank’s profit for the second quarter of 2021, was on the back of a decrease of some Ghs 10 million in the bank’s net interest income which fell from Ghs 163 million in Q2 2020 to Ghs 153 million in Q2 2021.
The recorded profit for Q2 2021, per the bank’s Q2 2021 Unaudited Financial Statement, translates into some 0.01 pesewas dividend payments to shareholders.
Peruse details of financial statement below: