Akwapim Rural Bank posts further remarkable growth

2nd from right, Nana Saforo Okuampa lll (Apiredehene); 5th from right, Osabarima Ansah Sasraku III (Kyidomhene of Akuapem Traditional Area); 4th from left, Mrs. Emma Cordelia Owusu-Amoah (BOD Chairperson); 2nd from left, Mr. Kwame Gyeke-Amoako (BOD Vice Chairman); 4th from right, Mr. Kojo Mattah, MD-ARB Apex Bank Limited

Akwapim Rural Bank Limited at Mamfe in the Akwapim North district of Eastern Region has posted yet another impressive operational performance, for the 2018 year under review.

The bank recorded satisfactory growth in almost all the financial indicators, with Net Interest Income recording a marginal growth of 0.44% from approximately GH¢10.5million in 2017 to a little over GH¢10.56million in 2018. This is an improvement on the bank’s income generation activities, reflecting the careful execution of strategy during the year under review.

The bank’s total deposits grew from about GH¢48.98million to approximately GH¢54.87million in the 2018 year under review, representing 12% of the 2017 performance – even though government domestic borrowings resulted in high interest rates on Treasury bills during the year under review. This came as a result of hard working staff and the mobilisation drive pursued by management and staff.

However, as a result of rising cost of operation from expansion in Branch network and sluggish growth in revenue, the bank’s post-tax profit before other comprehensive income declined by 30.63% – from approximately GH¢1.3million in 2017 to a little over GH¢900,000 in 2018.

The Chairperson of the Board of Directors, Mrs. Emma Cordelia Owusu-Amoah, announced these and more at the bank’s 38th Annual General Meeting of shareholders held recently at the Wesley Hall, Methodist Girls’ Senior High School Mamfe, Akuapem.

According to her, profitability within the banking sector moderated in 2018 relative to 2017. The industry’s net profit after tax of GH¢2.40billion in 2018 signalled a slower growth of 12.5 percent year-on-year in December 2018, compared with 21.7 percent growth in 2017.  Both interest income and interest expense respectively declined by 7.0 percent and 18.0 percent in 2018, partly as a result of the general decline in interest rates during the year and lower levels of loans and borrowings.

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The banking sector’s after-tax return on equity (ROE) and before-tax return on assets (ROA) declined marginally during the review period. The slower growth in before and after tax profit, despite the stronger growth in assets and equity in 2018 relative to 2017, contributed to the overall decline in the two profitability indicators.

The Banking sector clean-up exercise came with initial setbacks for the banking industry, as some depositors resorted to panic withdrawals for fear of losing their funds. However, confidence was later restored following assurances given by the regulator (BoG) and the integrity exhibited by remaining banks.

In spite of the challenging macroeconomic and political environment that pertained, the bank managed to pull out yet another satisfactory operational performance in almost all financial indicators for the year under review, as indicated in the table below.

The bank’s paid-up capital increased from GH¢1,774,246 in 2017 to GH¢2,153,013 in 2018, an increase of 21.35%. The Chairperson appreciated the continued patronage of the bank’s shares, and urged shareholders to buy more shares to boost the bank’s paid-up capital.

In line with the Board of Directors’ decision to ensure that the financial returns to shareholders of the bank continue to grow, the Board proposed a dividend payment of GH¢0.0050 per share.

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Thus, for each 1000 shares a dividend of GH¢5.00 will be paid. In total, an amount of GH¢478,481 has been earmarked as dividend for 2018 financial year, constituting a payout ratio of 53.1% as compared to 45.0% (GH¢572,782) in 2017.

The bank was ranked in the 10th position by the Efficiency Monitoring Unit (EMU) of the ARB Apex Bank at the end of December 2018 among the 143 RCBs operating in Ghana, declining from the 5th position in December 2017. Low earnings/profitability accounted for the decline.

The quarterly ranking uses 16 criteria grouped under the target areas of Capital, Asset quality, Asset utilisation, Earnings/Profitability and Liquidity (CAEL). Efforts are being made to improve on this performance.

The Board Chair person in her concluding remarks acknowledged the Board, Management and Staff’s commitment to the bank’s objectives, and said their individual and collective efforts have culminated in the significant improvements in operational results for 2018 financial year.

 

Indicator 2017

GH¢000,000

 2018

GH¢000,000

 

 

Total Deposits 48,987,73 54,875.42
Loans And Advances 15,379.77 17,424.46
Investment  34,861.56 37,956.80
Net worth   9,883.41 10,133.62
Total Assets 60,673.31 67,594.77
Profit Before Tax  1,786.20 1,101.94

 

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