SG-SSB Battles Loan Recovery

Though SG-SSB�s revenue in the third quarter of 2012 shot up by 24 percent to GHS110.4 million on the back of an impressive growth in non-interest income by 132 percent, its loan default increased by a whopping 110 percent to GHS3.05 million, casting a dim outlook on loan recovery for the bank. The bank�s net interest income increased by a marginal 6.1 percent, accruing from interest income and expense, which stood at GHS65.4 million and GHS11.6 million respectively. Its net profit significantly improved with a 48.1 percent growth over same period 2011. Deposits grew by 34 percent accompanied by a 51 percent increase in loans and advances. Frontline Capital Advisors, stock analysts, which revealed the foregoing in their recent analysis from the nine-month synopsis of the bank, said SG-SSB has the potential for expansion since the bank has not tapped deeply into the remote retail market in Ghana. �The bank could also leverage the strong presence of its parent company, Soci�t� G�n�rale Group, in West Africa.� Operating income recorded GH�124,093,000 while operating expenses stood at GH�80,661,000. Profit-before-tax was GH�40,226,000 while profit-after-tax was GH�30,170,000. �We downgrade our recommendation of SG-SSB to REDUCE based on a 12-month fair value price target of GHS0.71, which represents a capital gain of 0.8 percent in local currency terms. SG-SSB has witnessed a positive rally on the stock market, which has translated into a year-to-date price appreciation of 45.8 percent. As the stock approaches its 5-year high, further gains can only be propelled by a catalyst to break through the resistance,� the stock analysts stated. SG-SSB Limited (SG-SSB) was incorporated in 1977 as Social Security Bank to engage in the business of banking. SG-SSB provides commercial banking services to retail, corporate and small and medium scale enterprises. The bank has 45 fully networked branches, agencies and outlets. SG-SSB operates as a subsidiary of Soci�t� G�n�rale Group.