The Asante Akyem Rural Limited at Juansa in the Asante Akyim North district of the Ashanti Region has held its 33rd shareholders meeting, to review the bank’s operational performance for the 2019 financial year.
Operating Environment
During the year under review, Ghana’s economy saw some significant growth with GDP appreciating by 24 percent in the first quarter of the year from 5.4 percent to 6.7 percent. Meanwhile, inflation increased marginally from 9 percent in January to 9.5 percent in April 2019 and reduced to 9.1 percent by June 2019.
Also, the banking sector reforms ended successfully during the period. However, it was accompanied by some financial challenges on the operations of most financial institutions.
Operational Performance
According to Board Chairman, Dr. Philip Yaw Amakye, a significant portion of the bank’s funds with affected banks and investment fund management companies were locked-up during the period.
However, he said, due to prudent management the bank did not experience any liquidity challenge and ended the year successfully.
In spite of the turbulence recorded within the financial sector during the year under review, Asante Akyem Rural Bank recorded some marginal gains in its deposit mobilisation drive. It made Total Deposits of GH₵45.88million as against GH₵42.95million recorded in the previous year. This, represents an increase of 6.8 percent.
Dr. Amakye attributed this achievement to customers, while encouraging others to also patronise the bank’s deposit-products.
Total investment in Government Securities (T-bills) and money placement with Discount Houses increased from GH₵20.42million in 2018 to GH₵25.13million for the year under review, representing 23 percent.
This performance positioned the bank to meet all liquidity and capital requirements – Primary Reserve throughout the year averaged 9.8 percent instead of the required 8 percent, and the ARB Apex Bank reserve of 5 percent was maintained as required throughout the year.
Again, the Secondary Reserve requirement throughout the year was averaged at 54.78 percent instead of 30 percent required, while Capital Adequacy ratio averaged 18.74 percent throughout the year instead of the 10 percent required.
The bank’s ordinary share capital also increased marginally – by 2.1 percent from GH₵1.42million in 2018 to GH₵1.46million for the year under review.
Dr. Amakye further appealed for all shareholders and the general public to buy more shares, in order to increase the share capital for future expansion.
Total Loans of GH₵16million were issued to businesses and salaried customers for the year under review, as compared to GH₵18.3million in the previous year (2018) – representing a decrease of 12.5 percent.
Dr. Amakye however explained that Asante Akyem Rural Bank had to make prudent decisions in the disbursement of loans, bearing in mind the locked-up funds. Customers’ requests for funds on their deposits had to be managed with loanable funds, since it was becoming difficult to retrieve locked-up funds – hence the reduction in total loans for the year under the review.
Notwithstanding the above, the bank was able to attend to all credit requests received from customers, except those for long-term Asset acquisition.
The bank made profit before tax of GH₵262,762 for the year under review as compared to GH₵1,310,397 in the previous year, representing a decrease of 79.95 percent.
As indicated earlier, the locked-up funds denied the bank investment income of GH₵1.450million, which led to a reduction in income and consequently affected the profit.
Total Assets increased from GH₵53.84million in 2018 to GH₵56.15million for the year under review, representing 4.3 percent increase; meanwhile, Net worth increased marginally by 1.02% from GH₵7.52million in 2018 to GH₵7.60million for the same period.
Dividend
In view of the challenges associated with the previous year’s operations which led to a reduction in profit – and further to the Bank of Ghana’s directive, banks and SDIs are to refrain from declaring and paying dividends; and so directors did not recommend the payment of dividend for the year under review. “We therefore appeal that shareholders should bear with us as we go through these challenges,” he added.
Corporate Social Responsibilities
A total amount of GH₵33,985 was spent as corporate donations – notable among them being the 34th National Farmers Day, where Wellington boots, cutlasses and spraying machines were donated to three Assemblies (Asante Akyem North, South and Central).
