Kintampo Rural Bank capital hits GH¢2.3m …..exceeding BoG minimum threshold by 130%

Yaw Effah-Baafi, Board Chairman-Kintampo Rural Bank

The stated capital of Kintampo Rural Bank Limited headquartered at Kintampo in the Bono East Region as at 31 December, 2018, stood at GH¢2.316 million.

The figure represents 130% more than the minimum capital requirement that all 144 rural and community banks (RCBs) are expected to meet by February 2020. The bank also ended the 2018 financial year with a capital adequate ratio (CAR) of 32.51%, representing 10% and 22.52% above the regulatory minimum and comfort levels respectively.

The Board Chairman of the Bank, Yaw Effah-Baafi, announced this at the 34th annual general meeting of shareholders, held at Kintampo. He said capital base and CAR of the bank position it with “ample buffer” to be immune to any threat that could trigger imminent collapse or whatsoever.

Commenting on performance indicators, he said the year under review started with the bank’s performance trending positively before the challenges that emanated from the banking sector clean up by the Bank of Ghana. That notwithstanding, the total operating income of the bank increased marginally by 8.68% from GH¢5.739 million in 2017 to GH¢6.238 million.

Gross earnings of the bank soared by 21.43%, increasing from GH¢27.782 million to GH¢33.736 million. Total deposits also went up from GH¢21.905 million to GH¢26.728 million, showing an increment of 22.01%. Total assets of the bank appreciated by 19.62%, rising from GH¢32.912 million in 2017 to GH¢39.370 million in 2018.

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The bank’s net loans and advances saw a growth of 26.45%, increasing from GH¢10.932 million to GH¢13.824 million. Meanwhile, net impairment charge in 2018 was GH¢339,533 which was higher than the previous year figure of GH¢105,559. Mr. Effah-Baafi explained that this was as a result of the bank’s stringent implementation of the IFRS9 related to adjustments and prudent internal risk management of credit.

The situation somehow impacted on the profit margin of the bank leading to a 20.60% decline; 2018 profit after tax was GH¢1.077 million as compared to GH¢1.357 million in 2017. The Board Chairman pointed out that the above measures are necessary and prudent in the short term to “sharpen our focus to build a more sustainable and profitable bank”.

The bank closed the year with GH¢8.475 million as Shareholders’ funds as against GH¢7.900 million in 2017, indicating a slight increase of 7.29%. The Director of the bank proposed a dividend of GH¢0.014 per share, amounting to GH¢269,467.

Mr. Effah-Baafi noted that the bank recognizes corporate social responsibility as a key component of its business and corporate culture, announcing that bank has earmarked GH¢145,200 to drill four mechanized boreholes at the operational areas-Kintampo, Buipe, Jema and Techiman. He said the gesture will be a monument for the celebration of the bank’s 40th anniversary in December 2019.

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