Nwabiagya Rural Bank bags GH¢4million profit...pays GH¢1m as tax to gov’t

September 11, 2017
Source: Seth Krampah | thebftonline.com
Nwabiagya Rural Bank bags GH¢4million profit...pays GH¢1m as tax to gov’t

 

Nwabiagya Rural Bank Limited at Barekese in the Nwabiagya District of Ashanti Region has posted yet another impressive operational performance in the 2016 year under review.

The Bank posted a pre-tax profit of approximately GH¢4 million in 2016   as against a little over GH¢3million in the previous year, representing a satisfactory growth of 32 %. 

The Bank has paid approximately GH¢1million to government as tax which is 25% of the total profit made by the bank  for the year 2016 year under review.

This new percentage tax upward review from eight to twenty - five per cent is really suffocating the industry and preventing a lot of the industry players to perform certain functions which made them more relevant as business entities.

The banks are unable to feed their statutory reserves with enough money as required by the banking law for growth and expansion work, support the various communities in which they operate as well as paying good dividend to their shareholders.

This, the Chairman of the Board of Directors Nana Owusu Sarfo Anwoma II has appealed to the government through Ministry of Finance and Economic Planning and the Ghana Revenue Authority to as a matter urgency take a second look at the tax upward review since it is crippling   the effort of most of the rural banks.

The Board Chairman made the appeal at the 31st Annual General Meeting of shareholders last Friday at Berekese in Ashanti.

According to him, Ghana’s economy experienced slow growth during the year under review at the backdrop of IMF fiscal consolidation programme and rising debt. With a GDP growth of 3.9% from 3.4% in 2015, general economic activities in the country could best be described as modest.

Similarly, the run up to the 2016 general elections created a lot of uncertainties in the business community of which Nwabiagya Rural Bank was no exception.

 

In spite of the challenging macroeconomic and political environment that pertained during the reviewed year, the bank managed to pull yet another satisfactory operational performance in all the financial indicators and paid 25% corporate tax in the year under review as indicated in the table.

 

 

Item

 

 

2014

Amount

(GHS)

2015

Amount in

(GHS)

 

2016

Amount in

(GHS)

% Increase in 2015 figures

Deposits

46, 891, 334

63, 769, 013

79, 471, 460    

25%

Investments

24, 045, 447

37, 044, 139

44, 186, 410   

19%

Total Assets

62, 374, 810

81, 947, 103

99, 559, 151

21%

Share Capital

  1, 839, 428

  2, 287, 759

  2, 355, 844

  2%

Loans/Advances

24, 299, 384

25, 846, 517

29, 833, 937

15%

Pre-Tax Profit

  2, 296, 367

  3, 032, 104

  4, 001, 294

32%

 

In line with the Board of Directors’ decision to ensure that the financial returns to shareholders of the bank continue to grow, the Board has proposed a dividend  of   0.060 per share on 17, 278, 340 ordinary shares. The dividend paid per share for the year 2015 was GH¢0.045 on 17, 149, 560 ordinary shares.

The bank’s paid-up capital increased from about GH¢ 2.3million in December 2015, to approximately GH¢ 2.35million as at December 31, 2016, recording an increase of GH¢ 68, 085 as at the close of the year 2016. The number of shares issued also increased from 17,176,838 to 17, 313, 007 showing an increase of 136, 169.

The bank’s net worth also went up from GH¢ 12.5million in December 2015 to a little over GH¢14million at the end of December 2016. This came about as a result of the bank’s impressive performance during the year under review.

The Statutory Reserve balance of the Bank as at the beginning of the year 2016 was about GH¢ 3million and this was increased by GHS 278, 940 in the course of the year to  stand at  a little above GHS 3.5million. The increment represents the 12.5 per cent transfer from the net profit after tax and before dividend for the year.

The statutory requirement is for the bank to maintain a capital adequacy ratio of 10 percent and the bank’s Capital Adequacy ratio, as at December 31, 2016 hovered around 19. 2 percent.

The Bank continues to offer assistance to communities and institutions within its catchment areas in terms of community development projects and financial support which amounted to GH¢176,520

The major economic areas that bene?ted include Education, Health, Sports and Recreation, Security, Financial Support  towards Farmers’ day celebrations and  scholarship awards to needy but brilliant students who are resident or hail from the Bank’s  catchment areas. 

The General Manager of the Bank,   Mr Samuel Nuamah Dankwa   in an interview with Business & Financial Times said the Bank’s business focus in 2017 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability through ICT.

The bank’s business model according to the General Manager is still tailored for the Micro Small and Medium Enterprises and would push for more market penetration as they develop new and better products and trusted relationships with clients of the bank.

He emphasised that the Bank would continue to pursue a massive share and deposit mobilisation, follow stringent cost reduction policies, strengthen internal control measures and develop the human capital to meet demands of functioning profitability in the competitive rural banking environment.

A modern mobile banking app is currently in use   and it has actually added a new dimension to that old product of the bank. The bank, in collaboration with the Energy Bank, has installed an ATM at the Bohyen branch   last year and efforts are far advanced to get the Bank to issue its own ATM cards that can be operated on machines elsewhere that are programmed to take Visa, gh-link and e-zwich cards.

 

The bank is yet to complete the process of introducing its trader-customers and,  particularly, the market women   to the modern Point of Sale (POS) devices that will make the placement of deposits and other products very convenient to these ‘very busy’ customers.