UT Bank Ltd, the SME Bank, reported a GHS 30.6million loss in the first half of this year largely on account of high interest expenses which negatively impacted its results and dampened the positive effects of interest income that recorded a strong growth of 30% during the period.
Total deposits increased by 29% from GHS 889million to GHS 1.2billion while total assets increased by 44% from GHS 1.4billion to GHS 2billion. The asset growth was driven mainly by the sharp cedi depreciation during the first half of the year.
Commenting on the company?s performance, Prince Kofi Amoabeng, CEO of UT Bank Ltd stated ?The year 2015 has been very challenging for the bank as the tough macro economic conditions and the protracted energy crisis continue to negatively affect the operations and performance of the business sector especially our core segment, the SMEs.
The first three months were particularly challenging, with the bank recording a GHS 28million loss during that period. We have since witnessed a vast improvement, as the results of the implementation of our turnaround plan kick in. In the second quarter, from April to June, we recorded a GHS 2.4million loss, 91% better than recorded in the first quarter, and in the Month of June recorded a GHC 1.3 million profit after tax?.
He added that ?Our turnaround plan is two tiered, with a broader plan of business transformation aimed at better positioning UT Bank to withstand external shocks, and a more narrow plan which addresses, directly, the internal challenges we have identified as a business. We are focusing more on issues such as loan recovery, risk management, effective cost management, and capital raising, among others. I must reiterate that UT Bank remains committed to supporting the SMEs by helping them address the risks that they face?.
Stephen Antwi-Asimeng, UT Bank?s Chief Operating Officer commented ?we believe that the worst is behind us and we are excited about the opportunities and prospects going forward as we execute our strategies. The early results of our plan give us confidence and we will continue on the current trajectory. I am personally excited to be working at UT Bank at this stage of the bank?s development?.
Gillian Slater, UT Bank?s Chief Financial Officer stated ?We anticipate a reduction of our cost of funds in the second half of 2015 based on improvements in our funding mix. Our capital raising is also underway and will contribute to the lowering of our cost of funds. We obtained shareholders? approval to raise capital through the issuance of both preference and ordinary shares. In both instances we have received strong expressions of interest and are hopeful that we will conclude on these in a timely manner?.
She concluded, ?The turnaround for the bank has begun, and we ask our shareholders and stakeholders to expect great things from UT Bank. We will end the year with a stronger, more liquid balance sheet ready for a strong performance in 2016?.