Amenfiman Rural Bank strategy to hit GH¢10m stated capital in 5 yrs

Dr. Alex Asmah-CEO, and Dr. Toni Aubynn-Board Chairman, conferring during the meeting

Shareholders of Amenfiman Rural Bank Limited, at Wasa Akropong in the Wasa Amenfi East Municipality of the Western Region, have unanimously agreed to the board of directors’ proposition and resolved to use 2018’s declared dividend to purchase more shares.

This has resulted in an increase in the bank’s stated capital by GH¢990,000 and increase in individual shareholdings by the equivalent of dividend entitlements.

The shareholders have also agreed to the board’s proposition for transferring an amount of a little over GH¢1.6million from reserves (Income Surplus) to Stated Capital, to be distributed to existing shareholders in the form of Bonus shares. This totals 8,251,700 bonus shares issued to shareholders. This implies that for every two shares held, one additional share has been issued for free; and a 50% Bonus Pay-out for 2 to 3 years or until such time the bank is able to reach the GH¢10million stated capital target.

Amenfiman Rural Bank has seen tremendous growth in all indicators over the past decade, but the bank’s share-price does not reflect this growth. In order to derive the right price for the bank’s shares, the Board commissioned a business valuation that resulted in the determination of a new share-price which reflects the bank’s current market value.

In order to give existing shareholders more of the value from the business, a window of 3 months has been made available for all existing shareholders to buy more of the shares at a concessionary price from July 2019 to Monday 7th October 2019, and which is strictly for shareholders who had shares at the close of register in 2018.

These proposals, according to the chairman of the board of directors, Dr. Toni Aubynn, are meant to give more of the bank’s success to existing shareholders. He has further advised all existing shareholders to take advantage of this one-time-opportunity to increase their shareholdings in the bank.

Amenfiman Rural Bank has met and exceeded the Bank of Ghana’s current capital requirement by more than 300%, and in addition built up an appreciable amount of reserves making a total shareholders fund in excess of GH¢25million – which makes the bank highly solvent.

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Dr. Aubynn has described this move as a long-term strategic view of the bank’s capital base and the imperative to continue to grow the stated capital and stay ahead of any possible future regulatory requirement, which has informed the board’s plan to increase the bank’s stated capital to GH¢10million in 5 years.

These and more were made known by the Chairman of the board of Directors, Dr. Toni Aubynn, at the Annual General Meeting of shareholders held recently at the assembly hall of Amenfiman Senior High School at Wasa Akropong.

According to him, the bank operated in a very challenging macro-economic environment during the reviewed year. He revealed that Ghana continued to witness significant improvements in the major macroeconomic indicators in 2018 as seen in 2017, with the exception of the cedi exchange rate against the dollar, the country’s major trading currency, which came under significant pressure saw a cumulative depreciation of 8.4% during the year.

Despite these improvements in macroeconomic variables, the micro-economy did not fare too well as local businesses continued their struggle – largely due to the temporary ban on small-scale mining in the country, which is a prevalent economic activity in the bank’s catchment areas. The year also saw an insurgent swollen shoot disease attack on cocoa farms in the western belt, which invariably adversely affected cocoa production in the bank’s catchment areas – resulting in the inability of some cocoa farmers to meet their obligations and the consequential impact on local businesses as a whole.

In spite of the macro-economic and competitive challenges, the bank was able to put up a satisfactory operational performance in almost all the performance indicators – appreciating at an average of 19% as shown in the table.

In line with the commitment of Amenfiman Rural Bank to support the communities in which it operates, an amount of GH¢429,201 was spent as part of its Corporate Social Responsibility on projects; in areas such as farming and farming programmes, education, security, health, water and sanitation among other social needs.

The bank received several awards and recognitions from local and international organisations during the year under review. Some of the recognitions included the prestigious Ghana Club 100 Awards, where the bank was recognised as one of the leading companies in the country; Business and Financial Services Excellence Awards organized under the auspices of the Ministry of Trade and the Western Regional Coordinating Council, where the bank also received both regional and national medals in the Gold category and other international business excellence awards by the World Confederation of Businesses, a business association wih over 300 corporate members based in the United States.

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The Chief Executive Officer of the Bank, Dr. Alex Asmah, in an interview with Business & Financial Times said the bank’s business focus in 2019 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.

He reiterated that Amenfiman Rural Bank is solid, well-capitalised and with significant liquidity. Dr. Asmah told customers and prospective customers of the bank to disregard any rumour that seeks to suggest the bank is folding-up and the Bank of Ghana will be coming after rural banks to close them down, as has happened to some financial institutions.

He said the bank’s decision to up its capital base to GH¢10million is strategic, as this will help deepen its operational excellence and efficient service delivery to its stakeholders.

“In keeping with our strategy of operational excellence and efficient service delivery, the bank plans to go digital. Indeed, very soon we will be launching our digital platforms to accelerate our growth,” he added.

He emphasised that the bank will continue with its five-year capitalisation strategy more aggressively, to beef-up the already exceeded minimum capital by 300%; follow stringent cost reduction policies; strengthen internal control measures; and develop the human capital to meet demands of functioning profitability in the competitive rural banking environment.

2018 Financial Performance compared to 2017

             Indicator        2017

GH¢000,000

     2018 GH¢000,000

 

   % Change
Total Deposit 148.8 189.2 27
Loans And Advances 59.6 58.5 2.4
Investment 88 92.3 26
Shareholders Fund 25.9 25 4
Total Assets 223.3 189.2 18
Profit Before Tax 4.1 5.1 -19

 

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