- bags GH¢6.73million profit
- pays GH¢0.027 as dividend
Francis Agyei – Bekoe, (left) CEO and the Board Chairman, Fred Asafu – Adjaye in hearty chat during the meeting
Bosomtwe Rural Bank Plc at Kuntanase in the Bosomtwe District of Ashanti Region has recorded impressive growth in all financial indicators in the 2023 year under review.
The Bank posted a pre-tax profit of approximately GH¢ 6.73 million in the 2023 period under review as against a little over GH¢ 2.4 million in the previous year, representing a remarkable growth of 169.30%.
The rise in profit is attributed to improved revenues generated from operations and prudent management of recurrent expenditures both on the part of the Board, Management and the entire Staff.
In view of this remarkable results, the Directors have recommended the payment of total dividend of GH¢I million representing GH¢0.027p dividend per share with a total qualifying share of 37,037,037 as at December 31, 2023.
The Directors of the Bank have obtained exceptional approval from the Bank of Ghana to pay dividends to the shareholders for the financial year of 2023. Bosomtwe Rural Bank PLC is among the few Banks approved by the BoG to pay dividend.
The regulator’s “No objection letter to dividend declaration and payment is a clear indication that, the Bank had complied with all the conditions necessary for the payment of dividend to shareholders in accordance with the relevant laws.
This dividend declaration and exceptional approval has actually brought a huge relief to the Bank’s Shareholders who have not received dividend for the past six years which is also an indication that the Bank has returned to the dividend payment regime.
At the previous Annual General Meeting, shareholders approved amongst others through a resolution, to issue additional shares through a right issue to raise the Bank’s stated capital up to GH¢5million.
The bank at the close of business on 30th June, 2024 in spite of the inability of the bank to pay dividend previously, coupled with some operational challenges, was able to raise GH¢1,428,828.00 from the Rights Issue, bringing the Bank’s total share capital to GH¢5,423,559.30.
Shareholders of the Bank expressed their joy after hearing the announcement of payment of dividend after four years of non-payment of dividend. They commended the board and management and urged the Bank to make the development of dividend declaration and payment sustainable.
Operational Environment
The Chairman of the Board of Directors, Fred Asafu – Adjaye announced these and more at the Bank’s 34th Annual General Meeting of shareholders held yesterday at Kuntanase in Ashanti.
According to him, Ghana’s economy continued to show signs of economic recovery and stability from the pandemic into the early part of 2022 only to be truncated by the spillover of the Russia-Ukraine war.
The supply chain disruptions associated with the Russia-Ukraine war and the tightening of financing conditions acted in concert to worsen Ghana’s debt levels, which were already at unsustainable levels, with attendant high debt-service cost and rollover risks.
The tight financing conditions in the face of widening financing gap were exacerbated by the Ghana sovereign credit rating downgrades and subsequent exclusion from the global capital market(s).
The combination of these adverse external shocks exposed Ghana to a surge in inflation, large exchange rates depreciation, and exerted significant financing pressures of the budget alongside rising public debt levels.
To address this economic crisis, the Government introduced Domestic Debt Exchange Program (DDEP) as one of the strategies. The effect of the DDEP on Government Budget revealed that the debt exchange programme resulted in about 77% reduction in the settlement value of the indicative bonds.
This led to losses that had a detrimental impact on the industry’s profitability.
The year-on-year inflation rate in Ghana for December 2023 was 23.2%, and this was a significant decrease from 54.1% inflation rate at the end of December 2022 comparatively, and this was also recorded as the lowest since March 2022.
The Ghanaian cedi weakened against the major trading partners like United States dollars, Euro and Pound sterling on the international market; the dollar being the major partner depreciated by 0.88% against the former in the period under review.
Operational Performance
In spite of the unstable macroeconomic environment in which the bank operated during the reviewed year, the bank managed to pull an impressive operational performance in all the financial indicators as shown in the table.
| Indicator | 2023
GH¢ |
2022
GH¢ |
% Change
|
| Total Deposit | 187,652,363 | 151,183,960 | 24.12 |
| Investment | 134,010,433 | 105,368,710 | 27.18 |
| Advances | 43,132,696 | 43,910,085 | (1.77) |
| Share Capital | 3,976,558 | 3,923,225 | 1.36 |
| Profit Before Tax | 6,729,996 | 2,499,114 | 169.30 |
| Total Assets | 206,160,098 | 168,047,360 | 22.68 |
Corporate Social Responsibilities
The Bank continues to offer assistance to communities and institutions within its catchment areas in terms of community development projects. In the year under review the bank spent an amount of GH¢86,000 on corporate social responsibility activities towards the stakeholders with special focus on security, education, community development among others.
Future Outlook
The CEO of the Bank, Francis Agyei – Bekoe tells Business & Financial Times in an interview that as the Bank now enters into growth and substantial profit-making trajectory, they would leave no stone unturned to sustain the thrust.
According to him, the Bank will continue to see its strength in the area of managing the credit needs of the small and medium enterprises as well as continuing to improve upon the support the bank offers to this sector of the economy.
Management would continue to seek ways of strengthening and developing the Banks’ operations to maintain the confidence that customers and shareholders have in the Bank.
The Bank’s business model according to the CEO is still tailored for the Micro Small and Medium Enterprises and would push for more market penetration as they develop new and innovative products and trusted relationships with clients of the bank.
Regulatory Advice
The Managing Director of ARB Apex Bank PLC, Alex Kwasi Awuah, whose speech was delivered by Leonard Maasang, the Ashanti Regional Manager of ARB Apex Bank commended the Board, management and staff of Bosomtwe Rural Bank for the operational advancement in all critical financial performance indicators. This according to him is due to the bank’s emphasis on operational efficiency and cost management.
He mentioned the implementation of mobile banking and agency banking to improve the banking experience of rural bank customers with the assistance of the World Bank and the Ministry of Finance. He disclosed that so far, more that 1500 banking agents have been recruited through this initiative.
He urged the shareholders of the bank to have confidence in the board and support them to continue to deliver as expected and so that they would always have significant returns on their investment.
