Odotobri Rural Bank Limited, with its head office at Jacobu in the Amansie Central district of Ashanti Region, posted another remarkable operational performance in the 2017 financial year with 25% average growth in almost all indicators.
The Board of Directors has recommended a dividend payment of GH¢0.020 per share for 2017 as mandated by Section 73 of the Companies Code of 1963, Act 179. Thus, for a share price of one pesewa, a dividend payment of two pesewas gives 20% return to the shareholder.
The total amount to be paid shareholders as dividend for 2017 is GH¢551,210 – indicating 25% of approximately GH¢2.2million which is net profit after tax for the 2017 financial year.
The bank’s deposits went up by 23% from about GH¢68.6million in 2016 to a little over GH¢83.8million in 2017. This was achieved through hard work of the staff in deposit 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 the bank’s deposit base while mitigating any corresponding risks.
However, the bank recorded a 15% drop in profit for the year under review – from a little over GH¢3.96million down to approximately GH¢3.36million.
The Chairman of the Board of Directors, Bernard Asamoah Boateng, announced these and more at the bank’s 31st Annual General Meeting of shareholders held last Saturday at the Nana Adu Darko Community Centre in Jacobu.
According to him, government’s economic policy thrust in 2017 was to consolidate macro-economic stability and restore fiscal sustainability as an anchor for economic growth. In line with this objective, inflation witnessed downward trending month on month, and progressively declined to 11.8% by December 2017 – down from 15.4% in 2016.
He added that although the year under review saw a keen competition in the banking environment, the bank redefined its strategies by considering its strength, weaknesses and the external threats and opportunities to mitigate the far-reaching effects of those challenges and managed to pull yet another impressive operational performance in almost all financial indicators for the year under review, as shown in the table.
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¢178,140.
The major economic areas that beneﬁtted include Education, Health, Sports and Recreation, Security, Financial Support toward Farmers’ Day celebrations, and 21 scholarship awards to needy but brilliant students who are resident in or hail from the bank’s catchment areas.
The CEO of the bank, in an interview with Business and Financial Times, revealed plans to develop a mobile application that enables customers to transfer credit to other branches of the bank and other rural banks. The application will also enable transfer of funds from the rural bank to commercial banks on the same platform.
Mr. Ahmed said the initiative will strengthen the capital base through deposits and enhance fund mobilisation. “Mobile banking is the order of the day, so if you don’t give your client this innovative service we may lose quite a number of customers,” he stressed.
To sustain the gains, the CEO says the bank is also introducing bancassurance as part of new innovative ways to serve customers.
“We are looking at a one-stop shop, so we are going to introduce bancassurance and all manner of insurance packages – like child education, investments for clients, and funeral-insurance; because in Ashanti Region if you don’t do anything about funerals, you will lose out,” he said.
He explains that often the bank loses out on a chance to increase its deposits because clients continuously request insurance policies which they do not have.
The Kumasi Manager of ARB Apex Bank, Mr. George Annor, in an address delivered on behalf of Managing Director Mr. Kojo Mattah stressed that credit management practices in many of the banks are largely weak, and this has resulted in a number of RCBs reporting high levels of non-performing loans.
Statistics from the RCBs Performance Report at the end of March 2017 indicated that the rural banking industry recorded a Non-Performing Loan Ratio of 14.20% – which was significantly higher than the benchmark of 5%.
Mr Mattah has therefore entreated all boards and management of RCBs to put in place measures to strengthen credit management so that its attendant negative effect on liquidity of the banks will be averted, which will eventually enable the banks to improve their profitability performance.
|PERCENTAGE CHANGE (%)|
|PROFIT BEFORE TAX||3,355,078||3,960,144||-15.28|