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07.08.2013 Business & Finance

Abokobi Rural bank posts over 500 % profit

By Daily Graphic
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The Abokobi Area Rural Bank, a pioneer rural bank in Ghana, made a whopping 519.99 per cent increase in profit before tax in 2012 after it plummeted into a loss in 2010.

The bank closed the financial year with a profit position of GH¢306,108.00 from GH¢58,868.00 in 2011, which the ARB Apex Bank, the umbrella body of rural banks, had attributed to effective and efficient management of its resources.

Although the bank posted substantial increases in deposits and assets and thus declared a dividend of 3.32 pesewas per share, the Board Chairman, Nii Afutu Brempong III, at the bank's 2013 annual general meeting at the weekend, said its stated capital growth moved at a snail pace, which had become a concern for management.

With a marginal increase of 1.46 per cent in stated capital at GH¢185,266.00 in 2012, he said, records showed that about 90 of shareholders owned less than 1,000 shares, which was not encouraging, given the bank's recent performance.

"What is more disturbing is the fact that most of us bought our shares at the initial rate of GH¢0.01,' and this he said compelled the bank to fall on its reserve for expansion and other capital developments for the operating year.

The bank, therefore, at its well-attended AGM, launched a special share mobilisation programme aimed at raising its stated capital to GH¢500,000.00.

But in response to the call to increase holdings during discussion's of the financial report, the shareholders accused the present directors of the board of having very low number of shares in the bank, hence the low interest from the ordinary shareholders.

Nii Brempong III said competition on the financial market was becoming more and more serious, which called for expansion in infrastructure, creation of more attractive products, development of human resource capacity, with attractive rewards, and projection of the bank's name and image through regular advertisements.

Appealing further to the existing shareholders, he said, 'now that your bank is on the ascendancy to reach the skies, do not let outsiders take control of the bank by their acquisition of shares.'

The bank's total assets grew by 32.51 per cent from GH¢5,074,890 in 2011 to GH¢6,724,550 in 2012, with its time deposits and savings growing from GH¢514,917 to GH¢820,411 and from GH¢2,428,558 to GH¢3,077,791, respectively.

In the near future, the bank intends to open more branches, expand its microfinance programme, repackage its Susu scheme, provide mobile banking service, intensify loan recovery and build the capacity of its staff.

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