The Adansi Rural Bank PLC at Fomena in the Adansi North district of Ashanti Region has posted a satisfactory growth in some financial indicators for the 2021 year under review.
The bank recorded a profit before tax of a little over GH₵745,000 in 2021 as against GH₵4.10million in 2020. This is due to some high level of provision for Bad and Doubtful Debts due to the downgrading of some loans.
The provision of a little over GH₵4.3million had to be made for this purpose, and significantly affected the bank’s profit. However, measures have been put in place to recover all such loans and further avert possible loan loss in the years ahead.
The Total Assets of the bank hit GH₵125.32million in December 2021, representing an increase of 11.89% from GH₵112.01million in 2020.
The Deposit liability of the bank went up by 13.96% from GH₵96.53million in 2020 to approximately GH₵110million in 2021. The increase was a result of attracting new customers and deepening the bank’s relationships with existing customers, and partly due to the new branches opened at Ejisu and New Asokwa.
Chairman of the Board of Directors, Kofi Ampofo Agyapong, said these and more at the bank’s 32nd AGM of shareholders at Fomena in Ashanti.
Operational Environment
According to him, there were some challenges – especially with inflation increasing consistently in the last two quarters, which saw it end at 12.6 percent for December 2021. The local economy recorded a Gross Domestic Product (GDP) average growth of 5.4% in 2021, compared with an average growth of 0.5% in 2020. Due to this, the Monetary Policy Rate (MPR) of 12.5% that started the year had to be increased by 200 basis points and close at 14.5% by December 2021 to curtail inflationary hikes.
Mr. Agyapong noted that aside from the COVID-19 pandemic, the bank’s operations were affected by locked-up investments, non-performing loans, frequent customer loan pay-off in the PSELF loans, and general lack of confidence in the banking space.
He however mentioned that the dexterity of the Board of Directors, Management and entire staff with support from customers saw the bank maintain well-shaped operational stability for growth. He then called on authorities to help RCBs recover locked-up funds in the financial institutions which managed those locked funds.
Operational Performance
In spite of the challenging macroeconomic environment coupled with the unprecedented occurrence of locked up funds that pertained during the reviewed year, the bank managed to pull yet another satisfactory operational performance in some key financial indicators as indicated in the table below.
| ITEMS | 2021
GH₵ |
2020
GH₵ |
CHANGE | |
| AMOUNT
GH₵ |
PERCENTAGE
% |
|||
| Total Assets | 125,323,302.00 | 112,0101.660.00 | 13,312,642.00 | 11.89 |
| Shareholders’ Funds | 9,601,563.00 | 7,724,325.00 | 1,877,238.00 | 24.30 |
| Stated Capital | 4,892,890.00 | 3,761,460.00 | 1,131,430.00 | 30.08 |
| Deposits | 110,010,141.00 | 96,532,424.00 | 13,477,717.00 | 13.96 |
| Loans & Advances (Net) | 34,755,659.00 | 40,524,927.00 | -5,769,268.00 | -14.24 |
| Investment | 55,882,170.00 | 39,202,519.00 | 16,679,651.00 | 42.55 |
| Fixed Assets | 10,993,799.00 | 11,455,381.00 | -461,582.00 | -4.30 |
| Gross Income | 22,915,864.00 | 21,397,017.00 | 1,518,847.00 | 7.10 |
| Profit Before Tax | 743,808.00 | 4,102,889.00 | -3,357,081.00 | -81.82 |
Highlights of the Financial Performance
In an attempt to boost activities at the bank, various restructuring and changes in management to align with the bank’s five-year strategic plan were made – including recruitment of a new Chief Executive Officer, Daniel Amponsah, who began work from November 2021.
Dividend
The Board could not recommend the payment of dividend for the year since it has become necessary to build the bank’s reserves, and hence urged shareholders not to relinquish their support in the ensuing year.
Corporate Social Responsibility
The bank during the year 2021 under review supported the Farmers Day celebrations at Adansi North, Adansi South, Adansi Asokwa, Obuasi East and Obuasi West districts.
The bank also assisted the Fomena Fire Station of the Ghana National Fire Service (GNFS), and further provided support for training newly-recruited teachers within its catchment areas through the Ghana Education Service (GES).
Future Outlook
Mr. Agyapong further noted that with a new crop of management in place, the bank expects that based on strategic projections 2022 will complete the low side of returns due to the cleaning-up of their books, particularly locked-up investments and loans.
He expressed confidence that the bank will be able to meet shareholders’ expectations in subsequent years, as management will continue to put in pragmatic measures to ensure positive growth and achieve the bank’s Strategic Plan.
Chief Executive Officer of the bank, Daniel Amponsah, in an interview with the B&FT urged ARB Apex Bank to speed up on the upgrade of core banking application (software) Temenos 24 as promised.
He added that management will intensify loan recovery, deposit mobilisation and internal controls, and maintain quality assets to increase profitability.
In an address delivered on behalf of the Managing Director of ARB Apex Bank PLC, Alex Kwasi Awuah, by Ashanti Regional Manager of the ARB Apex Bank, Kofi Owusu, directors and management were encouraged to step-up efforts aimed at growing the bank’s loan book by reaching out to medium, small, and micro businesses and individuals.
“We know that the economy is going through challenging times – a situation that is putting a lot of burdens on individuals and businesses. The focus of Rural and Community Banks (RCBs) should be directed at supporting some small businesses and individuals who might be going through hard times.
