- On the backdrop of operational challenges, Kaaseman Rural Bank Limited at Sefwi-Kaase in the Bia East district of the Western Region, recorded a decline in its profit before tax from a little over GH¢1.47million in 2016 as compared to GH¢1.12million in 2017, representing a 23.6% fall.
The drop in profits was the result of high operational costs, including renovation of its Sefwi Kaase office building and the general macroeconomic pressure on banking activities such as the reduction of average interest rate on government 91-day Treasury bills from 16.4% in December 2016 to 13.3% in December 2017. Fierce competition from commercial banks and other financial institutions, especially ‘Susu’ Operators and Money leaders, also affected the bank’s profit growth.
In spite of the decrease in profit, the bank resolved to pay dividend to shareholders. During the 2017 annual general meeting, the shareholders passed a resolution to use 80% of dividend to shore-up their holdings in the bank. On the premise of that agreement, GH¢371,711 out of the GH¢464,639 declared dividend will be used to beef-up shareholders’ holdings while the remaining GH¢92,928 goes to the owners in cash.
The Board Chairman of Kaaseman Rural Bank, Paul Donkor who announced these at the 30th annual general meeting held at Sefwi-Kaase, said the bank however posted impressive performance in other indicators, influencing its public goodwill as well as its ratings by ARB Apex Bank.
Total loans and advances during the period under review grew from GH¢16.87million to approximately GH¢22.49million, reflecting 33.3% growth. Total deposits mobilised by the bank, on the other hand, recorded a satisfactory increase of 18.3% from GH¢31.98million to GH¢37.85million.
Short-term investments in government Treasury bills, which remained the bank’s major source of income, reduced marginally – by 2.8% from GH¢14.20million in 2016 to GH¢13.80million in 2017. The bank’s only long-term investment as at the close of the financial year was its holdings in the shares of ARB Apex Bank; the monetary value of the shares was put at GH¢126,590.
Apart from short-term investments in Treasury bills, commission on ‘Akuafo’ cheque purchases, according to the Board Chairman, was another reliable major source of income. However, the refusal of cocoa purchasing companies to enforce the use of Akuafo cheques in recent times has affected the bank’s income. The bank managed a slight increase from the commission on Akuafo cheques, increasing from a little over GH¢33.57million to GH¢37.55million.
The summation of incomes from various sources contributed to the assets-growth of 18.3%. In 2016, total assets of the bank were GH¢39.56million as compared to GH¢46.80million in 2017. Meanwhile, the bank posted increase in its stated capital from GH¢1,061,155 to GH¢1,516,092 – representing an impressive jump of 42.9%. Total reserves as at the end of the 2017 financial year stood at a little over GH¢4.70million as against GH¢4.68million in the previous year.
On corporate social responsibilities, Mr. Donkor said the bank spent over GH¢63,000 on various social interventions – such as a contribution toward the purchase of an incubator for the Essam Government Hospital, and construction of a police station at Sefwi-Kaase.