The amount far exceeds the Bank of Ghana’s minimum threshold of GH¢1 million mandated by all rural banks to achieve by February 2020.A press release issued by the bank said the above development further strengthened the bank’s position as the fourth bank in the Ashanti Region to exceed the minimum capital.
Notwithstanding this remarkable achievement, the bank recorded a dip in profit before tax during the year under review from the previous year’s gains of GH¢2.3 million.
This was attributed to the write-off of impairment of some investment resulting from the recent financial sector crisis.
The Chairman of the Board of Directors, Mr. Kofi Ampofo Agyapong, announced this and more at the 29th Annual General Meeting held recently.
He noted that the year under review was a very challenging one for the financial services industry, stressing that the turbulence witnessed by the sector in the year 2018 resulted in the revocation of the licences of some universal banks and other financial institutions.He said the Securities and Exchange Commission’s regulated asset management companies that had been a major source of investment avenue for Rural and
Community Banks (RCBs) witnessed even worse crisis, leading to the folding up of some of the companies.
“As a consequence of the foregoing, investment income witnessed a significant reduction while some banks wrote off their investments.
For us at Adansi, we have not been spared the ordeal.
We have had to write off some of our investments in reaction to the prevailing market conditions,” he added.
He further stated that efforts had been made to ensure that those investments were recovered in full and assured shareholders that the bank would continue to be strong and resilient.
In spite of the challenging macroeconomic and political environment that pertained during the reviewed year, the bank managed to pull yet another satisfactory operational performance in almost all the financial indicators in the year under review.
The Total Assets of the bank during the year under review stood at GH¢63.4 million, from GH¢54.7 million in 2017.
This marks an increase of 15.93 per cent.
Total Deposit grew by 23.58 per cent to GH¢55.4 million in the 2018 financial year, from GH¢44.8 million.
This feat was attributed to the commitment and dedication of management and staff.
It also made GH¢16.82 million in the 2018 financial year from investment in Treasury Bills and other money market securities as against GH¢16.57 million recorded in 2017.
The marginal growth, according to the board chairman, was as a result of the write-off of some impaired investments.
Advice & guidance
The Managing Director of the ARB Apex Bank, Mr Kojo Mattah, in reference to the investment loss during the year under review, said the ARB Apex Bank was at all times ready to provide guidance on major investment decisions and thus urged the Adansi Rural Bank and sister RCBs to call on it for such advisory support.
He noted that the growth assets of Adansi Rural Bank were encouraging. As a result of this, he expressed optimism of a remarkable turnaround of the bank by next year if the assets were rightly deployed, with the support of the shareholders.
Drawing some lessons from the mobile phone market, Mr Mattah advised RCBs to endeavour to be in touch with modernity or ‘fade out’ of the increasingly competitive rural banking sector.
“Those who refuse to learn to improve will definitely one day become redundant and not relevant to the industry. RCBs must endeavour to do the right things and do things right.”
Managers’ Conference - Fallout
Highlighting some of the resolutions taken at the recent Managers’ Conference, he reiterated that digitalisation of the entire operational value chain of RCBs was pivotal to their sustainability and growth.
In an interview, the General Manager of the bank, Mr Akwesi Ossei Nkrumah, said the bank was very well positioned to deliver on its mandate as a rural and community bank.
According to him, the directors were now challenged to deliver on their mandate and ultimately to ensure that shareholders got value for their investment.
The bank’s business model, according to Mr Nkrumah, was still tailored to the Micro Small and Medium Enterprises and would push for more market penetration as they developed new and better products and trusted relationships with clients of the bank.
He emphasised that the bank would continue to pursue a massive share and deposit mobilisation, follow stringent cost reduction policies, strengthen internal control measures and develop the human capital to meet demands of functioning profitability in the competitive rural banking environment.