South Akim Rural Bank leverages technology to fight cyber fraud

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The South Akim Rural Bank Limited at Nankese in the Suhum Municipality of the Eastern Region is taking advantage of the strong financial technology structure being deployed by the ARB Apex Bank Limited to improve operations and curb cyber fraud, which has been at an alarming rate in recent times.

The bank is equally relying on the stringent measures adopted by the Bank of Ghana, as well as ARB Apex Bank and the Association of Rural Banks, in equipping and ensuring that staff are well aware of the banking industry’s operational risk and compliance in the discharge of secure services.

The Board is poised to continue sustaining the prudent monitoring and supervisory roles in maintaining strong liquidity position, quality loan portfolio and enhanced customer service, which will automatically translate into improved profitability.

South Akim Rural Bank is currently conducting a feasibility study to open a branch on the Accra – Nsawam highway.  However, the Board says it will tread cautiously due to the Agency Banking that is being spearheaded by the ARB Apex Bank Ltd. to be rolled out soon.

The initiative promises to provide opportunity to link up with enterprises that will provide services on behalf of the bank, and the Board is prepared to take advantage of the scheme.

Chairman of the Board of Directors, William Kwadwo Boateng, said these and more at the 35th Annual General Meeting of shareholders held recently.

Operational environment

According to the Board Chairman, Ghana’s economic activities and financial environment experienced a marginal shift in performance indicators. Significantly, the Bank of Ghana policy rate saw a marginal drop to 16 percent in 2019 as against 17 percent in 2018; while the GDP growth rate was 6.5 percent in 2019 as compared with 6.3 percent in 2018.

Inflation Rate for year-end 2019 was 7.9 percent as against 9.4 percent in 2018. The cedi’s marginal depreciation against major currencies, coupled with unstable fuel prices and the collapse of some Specialised Deposit-Taking Institutions, generally constrained economic activities.

South Akim Bank operated under some unfavourable conditions, and they impacted adversely on the overall operational result.

Operational performance

Despite the challenges mentioned, the bank managed to put up a satisfactory operational result during the year under review, as indicated in the table below:

The operational performance showed a marginal relative increase in the bank’s performance in the year under review as compared with the 2018 financial year’s performance; the bank continued to make significant efforts at investing funds in secure financial instruments, thereby sustaining a comparative growth of 5.74% compared with that of 5.85% in 2018.

Year2019 (GH¢)2018 (GH¢)(% Change)
Deposit65,898,780.0059,189,330.0011.34
Investment 31,146,707.0029,455,499.005.74
Loans33,843,408.0032,951,756.002.71
Total Assets80,161,223.0074,873,550.007.06
Profit Before Tax1,057,510.003,242,037.00-67.38
Net Profit After Tax 633,209.002,160,363.00-70.69
Stated Capital3,448,472.003,223,655.006.97
Shareholders’ Funds10,540,257.0011,731,714.00-10.16

Payment of Dividend

In view of the BoG’s directive for all SDIs to desist from declaring dividends or distributing reserves to shareholders for the 2019 and 2020 financial years – with the primary reason to preserve capital and liquidity, the Board of Directors did not recommend members to approve the distribution of dividend for the 2019 financial year. The board has however assured shareholders that, at the appropriate time, their investment will be rewarded.

Corporate social responsibility

The bank continues to provide for communities, state agencies, educational and health institutions as well as individuals as part of its corporate social responsibility in its areas of operation. The total amount devoted was GH¢50,000. Mr. Boateng mentioned that discussions are still on-going toward handing over the proposed Nankeseman Senior High School to the Ghana Education Service.

Future outlook

The General Manager of the bank, Forsen Temeng, in an interview with Business & Financial Times said the bank’s business focus in 2020 and beyond is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.

Mr. Temeng has emphasised that the bank will follow stringent cost reduction policies, strengthen internal control measures, and develop the human capital to meet demands of functioning profitability as well as achieving the objective of overcoming shocks from the clean-up and the COVID-19 pandemic and its devastating effects.

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