The Nkoranza-Kwabre Rural Bank at Akuma in the Nkoranza Municipality of the Brong Ahafo Region is exploring possible avenues to raise funds in meeting the minimum capital requirement, and key on its agenda is to list on the Ghana Alternative Market (GAX).
This comes on the heels of the bank’s inability to meet the December 2017 deadline, set by the Bank of Ghana for all rural and community banks (RCBs) to increase their minimum capital to GH¢1million. As at December 31st, 2017 the stated capital of Nkoranza-Kwabre was just GH¢331,070 as compared to GH¢209,996 it raised in 2016 – representing 58% growth.
In an interview with B&FT, Mr. Frank Dwamena, General Manager of the bank said: “We have weighed the option of listing on GAX in order to raise the needed money as soon as possible. The bank has therefore consulted stockbrokers to facilitate the process, hoping that the capital market will save us”.
The bank is also considering the option of luring investors to rescue it from the current liquidity challenges. “Primarily, the bank is targetting well-to-do natives of the Nkroanza area living in the country and abroad, as well as embarking on a vigorous expansion of existing shareholdings to mop up more funds,” he added.
Despite its liquidity challenges, the bank posted satisfactory growth in other performance indicators during the 2017 financial under review. Total assets grew by 32% from approximately GH¢6.26million to GH¢8.24million. Accrued deposits for the year amounted to GH¢6.78million as against a little over GH¢4.96million in 2016, representing a 37% increase.
It increased loans and advances significantly, by 69% from GH¢2.48million to GH¢4.19million. However, the bank like many other RCBs slashed short-term investment by 5% to GH¢1.73million. In 2016, total investments was GH¢1.83million.
Speaking at the 33rd annual general meeting, Mr. Kofi Sarfo Kantanka, Chairman of the Board of Directors, said the bank for the first time in two years made a marginal profit of GH¢30,717. Nkoranza-Kwabre was among financial institutions that were badly affected by the infamous activities of collapsed micro finance institutions and other Ponzi schemes, thus compounding the bank’s struggle over the years.
The situation, he indicated, has drained the bank’s income surplus – leaving it at GH¢143,144. Meanwhile, shareholders’ funds increased by 61% from GH¢258,565 in 2016 to GH¢415,356 in 2017.
The General Manager, Mr. Dwamena, told B&FT that the bank will adopt innovative operational practices to aid its resurrection. He mentioned the introduction of a ‘special’ loan scheme for cashew farmers and restructuring of its microfinance to meet industrial standards. The bank has also stepped-up rebranding by giving a facelift to operational agencies. The Nkoranza branch has already been relocated to a more befitting banking place, while the Techiman branch will also be relocated as soon as practicable, he added.