Kintampo Rural Bank records impressive performance

Kintampo (B/A), Aug. 04, GNA - The Kintampo Rural Bank Limited (KRBL) has achieved an impressive performance in its 2016 operational year with a pre-tax profit of GH¢1.75 million.

This is an increase of 27.96 per cent over the previous year's which was GH¢1.39 million, Mr. Yaw Effah-Baafi, the Chair of the Board of Directors announced at the Bank's 32nd Annual General Meeting, at Kintampo in the Brong-Ahafo Region.

The total assets of the Bank grew from GH¢22.14 million in 2015 to GH¢27.46 million, representing an increase of about 224.03 per cent, he said.

He explained that the assets' growth was mainly funded by a 20.44 per cent increase in customer deposits to close at GH¢17.14 million; up from GH¢14.23 million and shareholders' funds, which increased by 20.11 per cent from GH¢5.81 million to GH¢6.98 million.

Mr. Effah-Baafi stated that the Bank's liabilities, its loans and advances portfolio grew from GH¢8.11 million in 2015 to GH¢9.68 million in 2016, signifying an increase of 19.37 per cent.

The Bank maintained a relatively high capital adequacy ratio of 31.43 per cent 'which is well above the minimum regulatory requirement of 10 per cent, thus providing an ample buffer against any eventuality,' he said.

Mr. Effah-Baafi said the Bank paid a corporate tax of GH¢473,785.00 to the Government during the year under review, as against GH¢118,561.00 for 2015, implying an increase of 299.61 per cent.

He observed that the imposition of high rate of corporate taxes on banks was gradually affecting the operations of most rural and community banks in the country,.

This, Mr. Effah-Baafi explained, was because rural banks were supposed to alleviate poverty and build up the economic livelihoods of the rural and peri-urban communities, therefore, the huge taxes imposed on them would hamper their operations.

He, therefore, appealed to the Government 'as a matter of urgency' to reduce the 25 per cent corporate tax on rural and community banks to enable them to stay in business and continue to support the rural population.

'The nature of rural banks and the areas they operate in would require government's interventions from time to time to sustain the banks growth,' the Board Chair appealed.

Mr. Effah-Baafi announced that the Bank had already met the requirement for rural and community banks to increase their minimum capital to GH¢1 million by the end of 2017, ahead of the deadline stipulated by the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 230) .

He, however, urged the shareholders to increase their shareholdings to enable the Bank to invest in capital projects like ATM and other E-Banking prepositions.

In the areas of lending to Agriculture and Small and Medium Scale Enterprises (SMEs), corporate governance and corporate social responsibilities, Mr. Effah-Baafi described the Bank's performance 'as very impressive'.

He cited that it partnered the USAID-Financing Ghanaian Agriculture Project (USAID-FinGAP) to advance a loan of GH¢0.96 million to 428 beneficiary farmers in the cultivation of maize, soya bean, rice and their value chain at a reduced interest rate.

He said that represented 71 a per cent increase over the 2015 total advance to the agriculture sector of GH¢0.56 million.

Mr. Effah-Baafi added the Bank expanded its operations to cover most clients who were into SMEs within its catchment area and advanced GH¢1.47 million to support 298 groups with an average membership of four persons.

That translated to seven per cent increase over the previous year's total advances of GH¢1.37 million to the same sector.

GNA

By Nana Osei Kyeretwie, GNA