Amansie West Rural Bank Limited, at Antoakrom in the Amansie West district of Ashanti Region, has made some incredible gains in its 2019 year under review, despite recording a drop in profit.
The bank posted a net profit of approximately GH¢1.21million in the 2019 period under review as against approximately GH¢1.7million for the previous year, representing a drop of 25%
Chairman of the Board of Directors Ohene Baffour Kumah announced these and more at the bank’s 35th Annual General Meeting of shareholders held last Friday at Antoakrom.
According to the Chairman, the ripple-effect of the financial sector clean-up carried out by both the Bank of Ghana (BoG) and Securities and Exchange Commission (SEC) impacted the operations of financial institutions.
This was against a year that saw improvements in the macroeconomic environment accompanied by expansion in domestic demand due to increased private consumption.
Headline inflation eased to 7.9% in December 2019 from 9.4% at the end of December 2018, on the back of lower food prices amid stable non-food prices.
However, the Ghana cedi depreciated against the major trading currencies during the reviewed year of 2019 despite a strong performance in the first quarter.
In respect of these difficulties that had to be surmounted, the bank redefined its operational strategies considering its strength, weaknesses and the external threats and opportunities to mitigate the far-reaching effects, and managed to pull yet another remarkable operational performance in almost all financial indicators for 2019 as indicated in the table.
|Profit Before Tax||1,212,717.00||1,687,898.00||(28.15)|
The Board did not recommend dividend payment for the 2019 financial year, based on the Bank of Ghana’s Directive (Notice No. BG/GOV/SEC/2020/03) dated 20th April 2020.
The Board Chairman appealed to shareholders of the Bank to accept the decision, but further educated thme that the directive from the regulator instructing banks not to declare and pay dividend is a bid to build a resilient, strong liquidity and financial position for the bank, and also due to the negative impacts of COVID-19.
He however assured shareholders that the reserved financial resources will be utilised judiciously in order to earn more profits for the bank’s growth and development to ensure the payment of dividends in future.
The bank’s stated capital increased from a little over GH¢2.6million at the end of December 2018 to approximately GH¢4.1million as at the end of December 2019. The significant increase of 49.37% was the result of selling 5,462,700 ordinary shares at GH¢0.25 per share, amounting to GH¢1,365,675. The Chairman advised that even though the bank has exceeded the minimum capital requirement of GH¢1.0million set by the Bank of Ghana, the shareholders are further encouraged to buy more shares to support and sustain the bank’sgrowth.
The bank paid a total cocoa transfer of GH¢84,981,666 in the year under review. This fell short by 11.92% when compared with the amount of GH¢96,481,032 paid for cocoa transfers in 2018. The reduction was mainly due to a drop in crop harvest.
Corporate Social Responsibility
The bank continues to offer assistance to communities and institutions within its catchment areas in terms of community development projects. In the year under review, the bank spent an amount of GH¢107,657 on corporate social responsibility activities toward the stakeholders – with special focus on Education, Health, Security among others.
The Ag. General Manager of the Bank, Mr. Frederick Kyei Kwakye, in an interview with Business & Financial Times said management will continue seeking ways of strengthening and developing the banks’ operations to maintain the confidence that their numerous customers and shareholders have in the bank.
According to him, the business focus in 2020 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.
“We will also intensify loan recovery, deposit mobilisation, internal controls and maintaining quality assets to increase profitability,” he stressed.
He emphasised that the bank will follow stringent cost-reduction policies, strengthen internal control measures, and develop the human capital to meet demands of functioning profitability as well as achieving the objective of overcoming shocks from the clean-up as well as the COVID-19 pandemic and its devastating effects.