Kintampo Rural Bank posts healthy growth…..with 27.96% profit increase
Kintampo Rural Bank Limited at Kintampo in the Brong Ahafo Region has posted strong growth and balanced performance in the face of financial indicators in the 2016 year under review.
Highlights of the bank’s performance include a profit before tax of GH¢1.75million in 2016 as compared to GH¢1.39million in 2015, showing an increase of 27.96%.
The Bank’s total assets grew by 24.03% from approximately GH¢22.14million to GH¢27.46million. The assets’ growth was largely funded by a 20.44% increase in the bank’s customer deposits, closing at GH¢17.14million, up from GH¢14.23million and shareholders’ funds which appreciated by 20.11% from GH¢5.81million to GH¢6.98million.
Thanks to expansion of its liabilities, the bank was able to increase loans and advances portfolio from GH¢8.11million in the previous year to GH¢9.68million in 2016, representing an increase of 19.37%. It also maintained a relatively high capital adequacy ratio of 31.43%. The ratio is above the 10% minimum regulatory requirement, thus providing the bank a sufficient buffer against any eventuality.
The Board of Directors of the Bank recommended 25% of net profit to be paid as dividend as against 20% in the previous year. A dividend per share was quoted at GH¢0.0272 and therefore pegged the total suggested payout at GH¢319,559.
Dr. Samuel Donyina-Ameyaw, Chairman of the Board of Directors in a report read for him at the 32nd Annual General Shareholders Meeting held at Kintampo said the bank’s strive for growth was underpinned by strengthening its market intelligence, deepening existing relationships with it valued customers and courted new ones as well as enhanced risk management coupled with innovations.
Paradoxically, Kintampo Rural Bank significantly increased its financial support to the agricultural sector. It partnered the USAID-Financing Ghanaian Agriculture Project (USAID-FinGAP) to advance GH¢0.96million to 428 farmers and other value chain actors who were into the production of maize, soya beans, and rice at a reduced interest rate. The 2016 disbursement represented a 71 % increase over the 2015 agric sector loan portfolio of GH¢0.56million.
Dr. Donyina-Ameyaw raised concern about the upward adjustment of corporate tax from 8% to 25%, saying “the corporate tax increase is suffocating rural banks.” The bank in 2016 paid corporate tax of GH¢473,785 as against GH¢118,561, representing 299.61% gargantuan increase.
He said: “the imposition of high rate of corporate taxes on banks is gradually affecting the operations of most rural and community banks in the country. Rural banks were supposed to help alleviate poverty and build up the economic livelihoods of the rural and peri-urban communities and that the huge taxes imposed on them will hamper their operations.”
The Bank has exceeded the Bank of Ghana minimum capital requirement of GH¢1million; its total stated capital as at December 31, 2016 was GH¢1,035,639, making it one of the two RCBs in Brong Ahafo to achieve that feat. The Board Chairman urged shareholders to increase their shareholdings to enable the bank invest in capital projects such as ATMs and other e-banking prepositions.
Mr. KojoMattah, Managing Director of ARB APEX Bank in a speech read for him applauded Kintampo Rural Bank for its success story. He attributed the 2016 achievement of the bank to ‘effective and efficient management of resources’ and urged the bank to build upon it in the years ahead.