ADB proves uber resilient

Agricultural Development: ADB will continue to improve
Dr. John Kofi Mensah, MD, ADB

… sees profit grow 341% in 2020

In what was a most unusual year – one that saw businesses across various sectors crumble under the weight of adverse economic strain brought about by the ongoing pandemic – the Agricultural Development Bank (ADB) has proven extremely resilient, posting a profit after tax (PAT) growth of 341% year-on-year (YoY).

According to the bank’s audited summary financial statements for the year ended 31 December 2020, PAT grew from GH¢14,823,000 to GH¢65,403,000 during the accounting period under consideration.

This, among other indicators, is testament to the bank’s robustness; and in many ways serves as vindication for the measures undertaken by the regulator prior to the advent of COVID-19.

A careful perusal of the statement shows that at a time when banks were tightening their purse strings and shutting their loan books temporarily, ADB saw a growth in the value of advances from GH¢1.469billion to GH¢1.912billion – representing a 30.16% rise YoY.

This came as management of the bank, during the accounting period under consideration, revealed that it had put measures in place to ensure that direct advances to the agricultural sector constitutes 50% of its loan book by 2022. Quite tellingly, customers’ deposits also appreciated by some 26.2% to GH¢4.281billion in 2020, up from GH¢3.392billion the previous year.

The YoY rate of growth in interest income (28.04%) outpaced the rate of growth in interest-related expenses (11.72%). Fees and commission income was also up by some 18.45%, from GH¢73.95million in 2019 to GH¢87.59million in 2020.

Despite the portion of Non-Performing Loans (NPL) relative to gross loans witnessing a 7.32 percentage point drop from 41.72% in the previous accounting period, it ended the year at 34.4%. The bank continued to remain highly liquid, particularly with reference to meeting its short-term obligations with a ratio of 117.76%, up from 144.98% over the same period in 2019.

Also, Earnings-Per-Share (EPS) of the Accra Bourse-listed bank stood at 24.99 Ghana pesewas at the end of 2020, up from 5.66 pesewas the previous year.

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