Akuapem Rural Bank PLC at Mamfe in the Akuapem North District of Eastern Region has demonstrated resilience and achieved significant financial growth across key performance indicators.
According to the Bank’s 2023 financial report, net interest income increased by 32.75%, rising from GH₵18.37 million in 2022 to GH₵ 24.38 million in 2023. This surge is attributed to an expanded loan portfolio and stronger investment performance.
The growth in income highlights the bank’s strategy of enhancing revenue through diversified loan and investment avenues, which increased by 27.78% to reach GH₵ 132.87 million by year-end.
The bank’s profitability was further evidenced by a 21.92% rise in post-tax profits, reaching GH₵ 1.35 million in 2023, up from GH₵ 1.1 million in the previous year. Though Akuapem Rural Bank recorded a rise in non-performing loans (NPL) due to lingering macroeconomic strains on borrowers, the bank’s overall health remains solid. The Capital Adequacy Ratio (CAR) stayed above the regulatory minimum, and liquidity levels also improved.
Akuapem Rural Bank saw a notable increase in customer deposits, which rose by 30.49% from GH₵105.09 million in 2022 to GH₵ 137.12 million in 2023. This rise reflects customer confidence in the bank’s services and solidifies its role as a trusted financial institution in the Eastern Region.
This deposit growth has allowed the bank to ramp up its loan portfolio, with total loans disbursed in 2023 amounting to GH₵ 98.14 million—a 53.54% increase over the previous year.
A significant portion of these loans was issued under the Credit with Education (CWE) Scheme, designed to support microfinance activities, which accounted for nearly half of the total loans disbursed.
Additionally, loans to government workers through the Controller and Accountant General’s platform contributed substantially to the bank’s lending operations. Akuapem Rural Bank has effectively broadened its lending base by targeting individual and government-backed loans, fostering growth within local communities.
The Chairman of the Board of Directors, Kwame Gyeke – Amoako announced these and more at the Bank’s 42nd Annual General Meeting of shareholders held in person last Saturday at the assembly hall of Methodist Girls Senior High School at Mamfe, in the Eastern Region.
Expanding Asset Base
The total assets of Akuapem Rural Bank grew by 26.81% to GH₵ 156.66 million in 2023, up from GH₵ 123.55 million the previous year. This expansion was largely driven by the growth in deposits and the bank’s commitment to reinvesting these funds into loans and investments. Over the past five years, the bank has consistently increased its asset base, highlighting sustained growth and prudent management.
The bank’s financial soundness was further validated by various stress tests and assessments, affirming that Akuapem Rural Bank, alongside the broader sector, remains stable. This stability is reinforced by ongoing recapitalization efforts supported by shareholders and the Ghana Financial Stability Fund, which provides a buffer against future economic headwinds.
Cost Management and Digital Advancements
Operating expenses rose to GH₵ 22.28 million in 2023, an increase from GH₵ 17.98 million in 2022. This rise was partly due to investments in compliance, administration, and customer service improvements. Despite the increase in operational costs, the bank maintained strong profitability, demonstrating effective cost management practices.
To enhance customer convenience, the bank also advanced its digitalization efforts. Akuapem Rural Bank implemented Ghana Pay and a USSD service, while also preparing to launch an agency banking model in collaboration with ARB Apex Bank. These digital initiatives aim to expand the bank’s reach and streamline customer interactions, reflecting the bank’s commitment to innovation and accessibility.
Dividend Recommendation and Shareholder Support
For 2023, Akuapem Rural Bank’s Board has proposed a dividend payment of GH₵ 538,576, equivalent to GH₵ 0.0034 per share. This recommendation has received approval from the Bank of Ghana, signifying a renewed commitment to rewarding shareholders.
The bank’s decision to issue dividends follows a challenging year in which dividends were withheld, underscoring its dedication to maintaining shareholder value as profitability recovers.
The bank’s capital structure also saw growth, with share purchases totaling GH₵ 74,892 in 2023, contributing to a total of GH₵ 373,927 in shares acquired over two years. However, these shares are yet to be registered at the Registrar General’s office and therefore are not reflected in the bank’s paid-up capital.
Recognition and Governance
Akuapem Rural Bank’s achievements in 2023 have not gone unnoticed. The bank was recognized as the Innovative Rural Bank of the Year by the Chartered Institute of Bankers, Ghana. This award, in addition to a strong rating from the Efficiency Monitoring Unit of ARB Apex Bank, highlights the bank’s excellence in corporate governance, financial literacy, and customer service.
The Bank is well-positioned to capitalize on emerging growth opportunities. The bank remains optimistic that the Ghanaian government will soon release funds locked up from previous years, further strengthening its capital reserves and enabling it to extend more credit to support local development initiatives.
Future Outlook
The Chief Executive Officer of the Bank, Kingsley Kyere in an interview with Business & Financial Times said the Bank would continue to put in pragmatic measures to ensure positive growth and achievement of the Strategic Plan of the Bank.
He stressed that the Bank would intensify loan recovery, embark on intensive deposit mobilization, strengthen internal controls and maintain quality assets to increase profitability.
He has also emphasized that the Bank’s business focus in 2024 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.
