The Kumawuman Rural Bank PLC at Kumawu in the Sekyere Kumawu district of Ashanti Region has posted yet another satisfactory growth in almost all financial indicators for the 2021 year under review.
The bank recorded profit before tax of approximately GH¢1.8million in the year under review as against a little over GH¢1million in the previous year representing 73.27% growth, whereas total assets stood at approximately GH¢159.2million as against a little over GH¢139.5million in 2020 at 14.11% growth.
The bank’s stated capital grew from approximately GH¢2.92million in 2020 to a little over GH¢2.94million in 2021, representing a marginal growth of 0.71% and exceeding the minimum threshold of GH¢1million required by all rural banks in Ghana.
Operational Environment
Chairman of the Board of Directors, Dr. Alexander Adomako Mensah, gave this information and more at the bank’s 29th Annual General Meeting of shareholders held recently at Kumawu in Ashanti.
According to him, even though there are still some challenges in the economy as a result of the COVID-19 pandemic, the economy saw some rebounds during the year under review after the easing of some COVID-19 restrictions.
The foreign exchange market was relatively stable and the local currency performed better in 2021. The Ghana cedi depreciated cumulatively by 1.7% and 0.80% against the US dollar and the British pound respectively, while appreciating against the euro.
The Real GDP growth was 5.4% in 2021 as against 0.4% in 2020 following the resumption of some businesses and trading activities in the country. Inflation inched a little higher to 12.7% from 10.4% in 2020. The Bank of Ghana Prime Rate remained unchanged from 2020 to 2021 at 14.5%.
Operational Performance
In spite of the many challenges faced by the Board of Directors and Management, they worked hard during the year under review to raise all performance indicators, as shown in the table below.
Key highlights of the bank’s financial performance in 2021 are summarised in the table below:
| SN | INDICATOR | 2021 | 2020 | CHANGE
(%) |
|
1 |
TOTAL INCOME |
21,750,863.00 |
14,119,487.00 |
54.05 |
|
2 |
OPERATING EXPENSES |
(19,939,351.00) |
(13,074,022.00) |
52.51 |
|
3 |
PROFIT BEFORE TAX |
1,811,512.00 |
1,045,466.00 |
73.27 |
|
4 |
PROFIT AFTER TAX |
1,194,177.00 |
482,256.00 |
147.62 |
|
5 |
TOTAL DEPOSIT |
147,918,763.00 |
129,981,170.00 |
13.80 |
|
6 |
INVESTMENT |
73,167,153.00 |
65,165,206.00 |
12.28 |
|
7 |
LOANS / ADVANCES |
51,109,020.00 |
42,493,754.00 |
20.27 |
|
8 |
SHAREHOLDERS’ FUNDS |
4,227,014.00 |
2,897,797.00 |
45.87 |
|
9 |
TOTAL ASSETS |
159,264,808.00 |
139,571,136.00 |
14.11 |
|
10 |
STATED CAPITAL |
2,943,052.00 |
2,922,442.00 |
0.71 |
|
11 |
TOTAL SHARES ISSUED |
9,736,275.00 |
9,660,572.00 |
0.78 |
Dividend
The Board could not recommend payment of dividend for the year under review. This is in compliance with the Bank of Ghana’s Notice number BG/GOV/SEC/2021/06 issued on the 12th April 2021 directing banks to suspend the declaration of dividend.
Corporate Social Responsibilities
The bank during the year under review supported institutions, communities and individuals as part of its corporate social responsibility. As a socially responsible institution, an amount of GH¢269,094 was spent on supporting individuals and institutions in the bank’s operational territories.
Key among the areas supported were: education (renovation of Kumawu R/C Primary, Scholarship for 18 students), health, community development, COVID-19, Farmers’ Day (Sekyere Kumawu district, Sekyere Afram Plains district, Ejisu Municipal, Old Tafo Municipal, Asokwa Municipal, Oforikrom Municipal, Sekyere East Municipal Assemblies).
The Managing Director of ARB Apex Bank, Alex Awuah, in his address commended the Board and management of Kumawuman Rural Bank PLC for a remarkable operational performance over the years, particularly in the area of compliance and corporate governance.
He urged shareholders to support the Board in their quest to continue running the bank profitably to create value for their investment.
Future Outlook
The bank’s CEO, Evans Sarfo-Kantanka, in an interview with Business & Financial Times said Management will continue to seek ways of strengthening and developing the bank’s operations to maintain the confidence of customers and shareholders.
The bank’s business model, according to the CEO, will still be tailored for the Micro, Small and Medium Enterprises; and will push for more market penetration as they develop new and innovative products and trusted relationships with clients, as well as improving the bank’s liquidity base by investing in cash assets.
The CEO also emphasised the improvement and strengthening of internal controls to ensure the bank’s growing assets are protected from major risks which come along with growth.
