Bosomtwe Rural Bank shareholders get 40% return on share investment

Francis Agyei Bekoe, CEO

The Bosomtwe Rural Bank Limited at Kuntanase in the Bosomtwe district of Ashanti Region has posted a remarkable operational performance in the 2017 year under the review, with 23% average growth in all indicators.

The Board of Directors has recommended a dividend payment of GH¢0.040 per share for 2017 as mandated by Section 73 of the Companies Code of 1963, Act 179. Thus, for a share price of ten (10) pesewas, a dividend payment of four (4) pesewas gives 40% return to the shareholder – which is quite impressive under the global and country macroeconomic challenges.

The total amount to be paid shareholders as dividend for 2017 is approximately GH¢945,000 as compared to the little over GH¢ 663,000 paid in 2016, representing a remarkable growth of 42%.

The bank’s Deposits went up by 19.5% from about GH¢45million in 2016 to GH¢ 54million in 2017.  This was achieved through the hard work of staff in deposits-mobilisation and inculcating effectively the culture of saving in the people. The board is therefore determined to continue formulating strategic policies and plans which will improve upon the bank’s deposit base while mitigating any corresponding risks.

These and more were captured in the report by Chairman of the Board of Directors, Philip Edward Kwabena Antwi Esq, which was delivered by Benjamin Osei-Boateng ESQ-Vice Chairman, during the bank’s 28th Annual General Meeting of shareholders held last Tuesday at  Kuntanase in Ashanti.

According to him, the bank registered satisfactory growth in all financial indicators, despite the unfriendly challenging macroeconomic environment in which the bank operated during the 2017 period under review – as shown in the table

YEAR 2017 (GH¢) 2016 (GH¢) CHANGE (%)
Deposit 53,792,862.00 45,004,114.12 19.53%
Investment 28,085,000,00 25,597,386.39 9.72%
Loans/Advances 17,928,283.00 14,953,064.75 19.90%
Total Assets 67,629,981.00 56,787,047.73 19.09%
Stated Capital 2,052,363.00 1,466,286.00 39.97%
Profit Before Tax 2,874,627.00 2,265,984.00 26.86%
Profit After Tax 2,084,823.00 1682,953.00 23.88%
Dividend Paid 944,695.64 663,715.68 42.33%
Dividend Per Share 0.04 0.04 0.00%

The macroeconomic indicators of Ghana’s economy did not favour businesses, leading to high cost of service delivery with very minimal marginal returns – even though inflation started dropping in the last quarter of 2017.

As expected, the rising cost of living left customers with no option but to slow the pace at which they had been keeping their excess funds with the bank. These have significantly reduced demand for credit facilities and had also brought about the relative potential of a default rate.

In spite of the challenging macroeconomic and political environment that pertained during the reviewed year, the bank managed to pull out yet another satisfactory operational performance in all financial indicators for the 2017 year under review.

The bank’s Loans and Advances portfolio also increased, by 19.9% from approximately GH¢15million in 2016 to about GH¢18million 2017.

The bank’s paid-up capital also increased from approximately GH¢1.47million in 2016 to a little over GH¢2million in 2017, representing an increase of 40% – which is over and above Bank of Ghana’s mandate of one million Ghana cedis (GH¢1,000,000) for Rural and Community Banks. New share purchases solely accounted for this significant increase of GH¢586,078.

The Board chairman appreciated shareholders’ patronage in purchasing the bank’s shares.  He however said it has been observed with some regret that there were some shareholders whose shareholdings were too small to earn them reasonable dividends.

He has therefore invited all existing shareholders to endeavour to increase their shareholdings so they can maintain the community ownership of the bank and to help it to stay above the regulator’s mandatory requirement; and in effect make Bosomtwe Rural Bank one of the strongest rural banks in Ghana.

In pursuance of its vision to promote community development in its operational territories, the bank extended support to communities, institutions and projects amounting to GH¢49,900 in 2017 compared to GH¢45,800 spent in 2016, as well as other donations.

Furthermore, the bank sponsored eight students in second cycle schools who are under its scholarship scheme during the year under review.

The CEO of the bank, Mr. Francis Agyei Bekoe. in an interview with Business & Financial Times stressed that the bank will continue to pursue a massive share and deposit mobilsation exercise, particularly to raise enough capital for the bank to stand ready for any regulatory directive regarding increase in share capital.

According to him the bank’s business focus in 2018 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.

Mr. Agyei Bekoe  is of the view that the rural banking industry has a purpose for which they were established, and Bosomtwe Rural Bank will not move away from its core objective of ensuring that the communities in which it operates sees the kind of development they desire to have.

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