- records 131% growth in profit
- meets minimum capital requirement
Kwaebibirem Rural Bank PLC at Asuom in the Eastern Region has recorded remarkable growth in all operational indicators for the 2022 year under review.
The bank recorded a profit before tax of approximately GH¢3.45million in the 2022 year under review against a little over GH¢1.4million in the previous year, representing an impressive growth of 131%.
The bank has now met the minimum required paid-up capital of GH¢1million, through the Board’s efforts with strategic investors who invested GH¢700,000 in Redeemable preference shares converted to ordinary shares.
Despite the challenging macro-economic environment that affected many businesses during the year under review, the bank recorded a significant growth in deposit from about GH¢36.8million in 2021 to GH¢48.6million for 2022 – representing 31.95% growth.
The bank’s total assets grew from GH¢40.7million in 2021 to GH¢57.1million in 2022, representing an impressive growth rate of 40%; with Loans and Advances increasing to GH¢13.2million as compared to GH¢10.2million in 2021 and representing 30% growth. The bank’s investment increased from GH¢ 21.7million in 2021 to GH¢34.5million, representing a growth of 59%.
Chairman-Board of Directors, Hon. Carlos Kingsley Ahenkora, announced these and more at the bank’s 36th Annual General Meeting of shareholders held last Friday at the Roman Catholic Church, Kade-Eastern Region.
Operational environment
According to him, Ghana’s economic challenges entered into full-blown macro-economic crisis in the year 2022 on the back of pre-existing imbalances and external shocks resulting from post COVID-19 recovery challenges and the Russia-Ukraine war.
Huge financing gaps and tightening fiscal conditions across the globe exacerbated debt sustainability concerns, shutting off Ghana from the international financial market.
External pressure on the economy caused prices of goods and services to rise more sharply than expected, leading to high inflation. This development affected general cost of doing business in the country, and the bank was not exempted. Within that period, the inflation rate rose from 12.8% in December 2021 to 54.1% for December 2022.
Operational Performance
Despite the challenging macroeconomic environment coupled with some unprecedented circumstances pertaining during the reviewed year, the bank worked hard to pull off a remarkable operational performance in all financial indicators for 2022, as indicated in the table below.
| Performance Indicator | 2021 | 2022 | % Change 2022/2021 |
| Total Assets | 40,669,665.00 | 57,112,851.00 | 40.43 |
| Total Deposit | 36,821,875.00 | 48,585,493.00 | 31.95 |
| Loans And Advances | 10,209,234.00 | 13,279,784.00 | 30.08 |
| Investment Other Securities | 21,790,257.00 | 34,591,714.00 | 58.75 |
| Profit Before Tax | 1,490,181.00 | 3,447,455.00 | 131.34 |
| Shareholders’ Funds | 1,460,704.00 | 4,404,570.00 | 201.54 |
| Total Operating Income | 8,122,899.00 | 11,527,525.00 | 41.91 |
| Total Expenses | 6,632,717.00 | 8,080,070.00 | 21.82 |
Dividend
With the bank’s impressive performance, the Board of Directors considered rewarding shareholders for sacrifices they had made over the period.
From that, the Board proposed a dividend payment for Bank of Ghana approval. However, the bank had not met the minimum capital at that time; and so the regulator declined the proposal by making reference to the Banking Act, which does not permit payment of dividend when a regulated financial institution has not met the minimum capital requirement.
However, despite this unfortunate happening and the engagement with the regulator, an amount of GH¢601,627 has been declared as bonus issue to shore-up the capital requirement.
Corporate Social Responsibility
In the 2022 year under review, Kwaebibirem Rural Bank PLC contributed to the development of communities in which it operates as part of its corporate social responsibility – in the areas of health, education, security and community development among others.
Future outlook
The bank has secured new office space for its Kade branch, because the old premises were not conducive for banking business. In addition, the old branch location also puts the bank at a disadvantage since it is far from the market centre. The new office is located directly opposite the Kade Market near the main lorry station entrance, and is being redesigned to make it very suitable for banking business.
The bank’s Chief Executive Officer, Prince Obiri Yeboah, in an interview with Business & Financial Times said its business focus in 2023 has been on driving growth, innovations, efficiency and service as the main pillars in achieving growth and profitability.
He stressed that the bank will follow stringent cost-reduction policies, strengthen internal control measures and develop the human capital to meet demands of functioning profitability; and also achieve the objective of overcoming shocks from the unfriendly macroeconomy and rising cost of living – as well as their devastating effects.
Commendation and regulatory advice
The Eastern Regional Manager of ARB Apex Bank, Nana Frimpong Asare – who addressed shareholders on behalf of Managing Director, Alex Kwasi Awuah – congratulated the bank for the swift turnaround to set it back on a growth and profit-making trajectory.
He therefore advised the Board and Management to institute a risk management policy to identify, assess, monitor and control risks, since the banking business has become very competitive and risky.
He applauded the 13.44 percent capital position of the bank, which is above the Regulatory Requirement of 10%, and further applauded Shareholders and Directors for working hard to improve that capital position.
He was happy to announce the highly anticipated arrival of a Mobile Banking solution for RCBs. This, according to him, is sure to bring relief and satisfaction to many.
He hinted that the project is currently in its testing phase of the USSD Application with over 2,000 RCB employees – and once the testing phase is completed, they will proceed to launch the approved USSD Code *992# to customers.
This code, he explained, will enable customers to access a wide range of banking services: such as funds transfer, bill payments, airtime top-up, bank statement requests and much more. Subsequently, they will initiate further phases of the Financial Sector Development Project; all of which are designed to enhance the banking experience at RCBs across the country.
