… records 498.53% growth in profit
The Bosomtwe Rural Bank Limited at Kuntanase in the Bosomtwe district of Ashanti Region has recorded a very remarkable operational performance for the 2021 year under review.
The bank recorded profit before tax of a little over GH¢2million in 2021 as against GH¢349,692 in the previous year, representing an impressive growth of 498.53% whereas total assets stood at approximately GH¢136million as against a little over GH¢123million in 2020 at 10.45% growth.
The bank’s stated capital grew from approximately GH¢3.89million in 2020 to a little over GH¢3.9million in 2021, representing a marginal growth of 0.65%: which far exceeds the minimum threshold of GH¢1million – by over 250% – required by all rural banks in Ghana.
Operational Environment
The Vice Chairman of the Board of Directors, Benjamin Osei-Boateng Esq., announced these and more at the bank’s 33rd Annual General Meeting of shareholders held last Tuesday at Kuntanase in Ashanti.
The Vice Chairman in his address mentioned that the local economic environment in which the bank operated during the year under review recorded some key indicators, and some of those key indicators impacted on the bank’s performance during the fiscal year.
Inflation trended upward from 10.4% in December 2020 to 12.6% in December 2021. Interest rates on the money market largely slowed down in terms of yield. The 91-day Treasury bill rate declined to 12.5% in December 2021from 14.1% in 2020, and the 182-day Treasury bill rate fell to 13.2% in 2021 from 14.1 in 2020.
The Ghana cedi depreciated by 4.1% and 3.1% against the US dollar and pound sterling respectively in 2021, compared with 3.9% and 7.1% depreciations in 2020. The cedi however appreciated by 3.5% against the euro compared to a depreciated rate of 12.1% in 2020. The banking sector’s performance remained strong during the year under review. Available data showed sustained growth in total assets, deposits and investments.
Operational Performance
In spite of the unstable macroeconomic environment in which the bank operated during the reviewed year, it managed to pull yet another impressive operational performance in all the financial indicators as shown in the table.
| Item | Year 2021
GH¢ |
Year 2020
GH¢ |
Percentage
Change % |
| Deposits | 121,982,683 | 110,665,513 | 10.22% |
| LOANS | 31,526,434 | 26,269,330 | 20% |
| Investment | 76,027,801 | 76,325,908 | -0.039% |
| Total Assets | 136,715,498 | 123,771,396 | 10.45% |
| Stated Capital | 3,909,545 | 3,884,145 | 0.65% |
| Profit Before Taxation | 2,093,043 | 349,692 | 498.53% |
| Profit After Taxation | 1,426,524 | 257,337 | 454.34% |
Dividend
The Board is unable to recommend dividend payment based on the bank’s current position. This is because the bank could not meet the provisions in section 35(1d), which state a bank or specialised deposit-taking institution shall not declare and pay interim or final dividend on the shares of that bank or specialised deposit-taking institution, unless the bank or specialised deposit-taking institution has completely written-off accumulated operating losses from the normal operations of that bank or specialised deposit-taking institution.
Currently, Bosomtwe Rural Bank still has some funds locked up; hence its inability to recommend dividend payment.
Corporate Social Responsibilities
The bank continues to offer assistance for communities and institutions within its catchment areas in terms of community development projects. In the year under review, it spent an amount of GH¢65,000 on corporate social responsibility activities toward the stakeholders; with a special focus on Farmers’ Day donations to four municipal and two district assemblies in its catchment areas.
Human Capital
The Vice Board Chairman mentioned that the Board is committed to building the Bank’s human resources’ capacity with appropriate knowledge, skills and attitude; and motivate them for effective service delivery by way of paying good salaries and allowances, providing training and creating a congenial working atmosphere.
Regulatory Commendation
In an address delivered by Kofi Owusu, ARB Apex Bank PLC Kumasi branch Manager, on behalf of the Managing Director, Alex Kwasi Awuah, he commended the Bank’s remarkable operations for the year under review.
“Even though there is still room for improvement, these impressive results deserve special commendation and emulation by sister-banks, because the business environment is highly unstable,” he added.
He humbly pleaded with shareholders to continue supporting the Board and Management to further deliver better results, because the current trends show that the bank is on the right track.
He pleaded with the Board to endeavour to commit more resources toward corporate social responsibility (CSR) in the communities. This, according to him, will make customers of Rural and Community Banks (RCBs) be sure that banks exist for the benefit of their communities.
Future Outlook
The bank’s CEO, Francis Agyei Bekoe, in an interview with Business & Financial Times said management will continue to seek ways of strengthening and developing the banks’ operations to maintain the confidence that customers and shareholders have in it.
The bank’s business model, according to the CEO, is still tailored for the Micro, Small and Medium Enterprises; and will push for more market penetration as they develop new, innovative products and trusted relationships with clients.
