Kumawuman Rural Bank Limited at Kumawu in the Sekyere Kumawu district in the Ashanti Region, has recorded a little over GH¢1million as profit coming – from a loss of approximately GH¢3million in the previous year, representing an impressive growth of 80.68% in the year under review.

The bank’s total deposits also went up very remarkably – from GH¢85.1million in 2019 to approximately GH¢130million in the year under review, representing 52.68% growth.

The bank, after surmounting the challenges that were born from reforms by the central bank  and negative effects of the COVID-19 pandemic, is devising a workable operational strategy to improve profitability levels and, subsequently, for growth.

And as part of its plans to increase profitability levels and improve efficiency at all levels, it is adopting effective measures in managing credit and other operational risks – which will result in the reduction of Non-Performing Loans (NPLs) and boost other assets.

Kumawuman Rural Bank also seeks to improve and strengthen Internal Controls to ensure that the growing assets and liabilities are protected from major inherent risks which come with the growth.

Other planned activities are to encourage Management in continuing the aggressive deposit mobilisation drive by establishing good banker-customer relationships, focusing on direct and tailor-made services; thereby boosting the general confidence of customers by focusing on the direct banking relationship with them.

The bank also wishes to expand the ownership portfolio by urging shareholders to increase their shareholdings, and also engage new prospective ones to come on board in anticipation of the central bank further reviewing the minimum stated capital upward.

These and more were contained in a speech delivered by Vice Board Chairman Alexander Adomako Mensah at the bank’s 28th Annual General Meeting of shareholders held last Thursday at the Presbyterian Church of Kumawu in Ashanti.

According to him, the year 2020 was a very challenging one for business in general, the banking industry in particular and the economy at large.

The industry suffered under shocks from the banking sector clean-up, with its attendant locked-up investment of RCBs.

The outbreak of novel COVID-19 pandemic heavily impacted on the performance of many businesses, and Kumawuman Rural Bank was no exception.

The national economy could not achieve its projected growth as envisaged by government fiscal policy. Real GDP growth declined from 6.5% in 2019 to 1.7% in 2020 as a result of the slump in world crude oil prices. Inflation rose to 10.4% from 8.7% in 2019 due to interruptions in production and supply value chains.

Operational Performance

Despite many challenges faced by the Board of Directors and Management, they worked hard during the year under review – with the bank recording remarkable growth in all the financial indicators as shown in the table below.

Dividend

In view of the BoG’s directive for all SDIs to desist from declaring dividends or distributing reserves to shareholders for the 2019 and 2020 financial years, the Board of Directors did not recommend members to approve the distribution of dividend for the 2020 financial year.

The board has however assured shareholders that, at the appropriate time, their investment will be rewarded. 

Corporate Social Responsibility

The bank continues to offer assistance to communities and institutions within its catchment areas in terms of community development projects and financial support, which amounted to GH¢106,851. The major economic areas which benefitted include Education, Health, Sports, Recreation and Security.

The Ashanti Regional Manager of ARB Apex Bank, Mr. George Annor, on behalf of the Ag. Managing Director, Mr. Alex Kwasi Awuah, congratulated the bank for its remarkable operational performance in the year under review.

He advised the Board and Management to institute risk management policies to identify, assess, monitor and control risks, since the banking business has become very competitive and risky.

The President of the Ashanti Chapter of Association of Rural Banks, Mr. Patrick Owusu, addressing shareholders of Kumawuman Rural Bank urged them to have confidence in the board and be advocates of the bank.

He further advised shareholders to increase their shareholdings with the bank and anticipate long-term benefits from their investments.