Feb. 22 (Bloomberg) -- Ghana Commercial Bank Ltd., the nation’s biggest lender by branches, gained for a seventh week as investors speculated it boosted profit by increasing lending to government workers who got a salary raise last year.
The stock rose 3.8 percent in the week, bringing its advance this year to 44 percent. More than 106,000 shares were traded, almost double the three-month daily average, as it added 0.3 percent today in Accra.
“One effective strategy the bank adopted last year was lending to retail customers on government payroll,” Randy Mensah, a stock trader at Ecobank Development Corp., said by phone. “As a state bank, GCB serves most of the government workers in the country.”
State employees received a 20 percent increase in their base pay last year as the government moved workers to a new payment system. Wage costs now take up 60.9 percent of the West African nation’s revenue, President John Dramani Mahama told lawmakers yesterday.
Ghana Commercial’s net income increased to 87.6 million cedis ($46 million) in the nine months through September from 38.3 million cedis a year earlier. Net interest income, the money banks make from lending, advanced 36 percent to 213.4 million cedis. Full-year profit may jump to above 100 million cedis, Mensah said.
The “perception about the bank out there is going well because of an ongoing rebranding exercise,” he said. Technology “is being upgraded for more e-banking product offerings and business portfolios are being restructured to drive profitability.”
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