The Adansi Rural Bank at Fomena in the Adansi North district of Ashanti Region has recorded an impressive operational performance in all financial indicators for the 2020 year under review.
The bank has recorded a pretax profit of a little over GH¢4.1million in the 2020 year under review, representing 182.5% growth over approximately GH¢1.45million recorded in the previous year.
Meanwhile, shareholders of the bank have pleaded to the Bank of Ghana to reconsider its stance on the non-payment of dividend directive – because of the bank’s current profitability levels – to pave way for them (shareholders) to get some relief in their investment with the bank.
The Bank’s total deposits increased from about GH¢71.2million in 2019 to a little over GH¢96.5million in 2020, representing an impressive growth of 35.7%. This was as a result of hardworking staff and a mobilization drive pursued by staff and management.
Chairman of the Board of Directors, Mr. Kofi Ampofo Agyapong, declared these and more at the 31st Annual General Meeting of shareholders held last Saturday at the Amoanimaa Dede II Hall at Fomena in Ashanti.
According to Mr. Kofi Ampofo Agyapong, the country recorded a Gross Domestic Product (GDP) growth rate of 6.5% in 2019 and the projection for 2020 was 4.9%. However, the COVID-19 pandemic that led to global lockdowns and its consequent economic meltdowns across the globe – of which Ghana was no exception – resulted in a significant reduction of the country’s GDP growth rate to 1.7% in 2020 compared to 2019.
One significant reason for the low GDP growth rate was a slump in oil price. As a result of significant revenue shortfall due to low economic activity and also high expenditures, especially from unforeseen and unexpected health-related expenditures, the fiscal deficit increased from 4.8% in 2019 to 16.2% in 2020. This was not helped by the expansionary monetary policy stance taken by the Bank of Ghana in order to mitigate the pandemic’s negative effects on the economy.
The bank for a considerable period in 2020 had to run a shift system as a measure to reduce the possible spread of COVID-19 in the bank and among its stakeholders. It was within these difficult challenges that the Bank, just like other business units in the country, operated during 2020.
In spite of the challenging macroeconomic and a ‘COVID -19 pandemic’ environment that pertained during the reviewed year, the bank pulled another very impressive operational performance in all the financial indicators for 2020, as indicated in the table below.
Highlights of the Financial Performance
Items 2019 2020 Percentage Change (%)
Total Assets 82,684,987.00 112,010,660.00 35.46
Shareholders Fund 4,196,794.00 7,724,325.00 84.05
Stated Capital 3,754,139.00 3,761,460.00 0.19
Deposits 71,156,200.00 96,532,424.00 35.66
Loans & Advances 37,135,111.00 40,524,927.00 9.12
Investment 20,172,903.00 39,202,519.00 94.33
Fixed Assets 7,909,743.00 11,455,381.00 44.82
Gross Income 16,586,269.00 21,397,017.00 29.00
The directors of bank were unable to recommend dividend payment due to the Bank of Ghana’s directive number BG/GOV/SEC/2020/03 for suspension of dividend declaration and payment for the year 2019 and 2020 as a result of the COVID-19 pandemic.
The Board Chairman therefore hopes that with the bank’s impressive operational performance in 2021 so far, the board will be able to recommend a substantial amount as dividend in 2021 when the restriction is finally lifted.
The Ashanti Chapter President of Association of Rural Banks, Mr. Patrick Owusu – who is also Board Chairman of Atwima Kwanwoma Rural Bank Limited, advised shareholders of Adansi Rural Bank to buy more shares and not be discouraged from investing in rural banks despite the BoG’s restriction on dividend payment.
According to him, the regulator’s decision to suspend dividend payment was made in the interest of both shareholders and customers, and for sustenance of the banking business in general.
He said they should be proud of themselves as business owners of rural banking – particularly in Ashanti Region, because returns on investing in rural banking is just like owning a cocoa farm because its generational benefits.
He advised them to remember that they are the legitimate owners of the bank, and so if they invest more the business will be better for them and their generations unborn.
The Business Development Manager of the Bank, Nana Agyemang Asamoah, said the bank’s business focus in 2021 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.
The bank’s business model, according to the Business Development Manager, is still tailored for the Micro Small and Medium Enterprises and will push for more market penetration as they develop new and better products, and trusted relationships with clients of the bank.
He stated that the bank will continue to pursue a massive share and deposit mobilization, follow stringent cost reduction policies, strengthen internal control measures, and develop human capital to meet the demands of functioning profitability in the competitive rural banking environment.