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18.12.2005 Regional News

Bonzali Rural Bank makes profit

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Kumbungu (N/R), Dec. 18, GNA - The Bank of Ghana and the ARB Apex Bank have both rated the Bonzali Rural Bank at Kumbungu in the Tolon/Kumbungu District of the Northern Region as "satisfactory", following its outstanding performance since its establishment five years ago.

Announcing this in an address read for him at the fourth Annual General Meeting of shareholders of the bank at Kumbungu on Saturday, Mr E. K. Kwapong, Managing Director of Apex Bank, said Bonzali Rural Bank grossed one billion-cedi profit last year as against 866 million cedis in 2003.

Mr Kwapong said, while total assets increased substantially from 12.85 billion cedis to 16.36 billion cedis in 2004, showing an increase of 27 per cent, advances, net of provision for "bad and doubtful debts" rose from 4.19 billion cedis to 5.86 billion cedis over the period, representing an increase of 39 per cent.

Total deposits rose appreciably from 7.30 billion cedis to 10.55 billion cedis, an increase of 44 per cent during the period under review, whereas investments recorded a jump from 3.62 billion cedis to 5.15 billion cedis over the period, reflecting a 42 per cent increase. "This is a very outstanding performance for which you deserve to congratulate yourselves against the backdrop of the fact that your bank was established a few years ago," he told the meeting.

Mr Kwapong noted that even though the bank's paid-up capital of 114.6 million cedis for last year was marginally higher than the minimum requirement of 100 million cedis for existing rural banks, "it is nevertheless substantially lower than the 500 million cedis prescribed by the Bank of Ghana for new rural banks".

"I would therefore, urge existing and potential shareholders to acquire more shares to strengthen the capital base of the bank to serve as a buffer against any untoward development and possible crisis in future.

"Furthermore, I would encourage you to liaise with your external auditors to take advantage of a Bank of Ghana directive to transfer part of your income surplus account to the stated capital to meet the stipulated requirement for new rural banks", he said.

Mr Kwapong reminded the shareholders that the Apex Bank had been established to support the rural banks to realise their full potential, especially to enable them to contribute significantly to the socio-economic development of their catchment areas.

He said: "in this direction, not only will the Apex Bank concern itself with the training of rural bank personnel on operational issues, but it will also train staff to build capacity in handling various vocations practised in our rural communities".

"It is in this regard that the Apex Bank, working in close collaboration with the donor community, has instituted various training programmes to address the training needs of rural banks". Mr Kwapong said the Apex Bank also has a programme for the education of shareholders to enable them to appreciate their roles and responsibilities within the framework of rural banking operations.

In a speech, Hajia Mariama Sumani Issah, Chairperson of the Bonzali Rural Bank Board said the bank was established to change the "rural passive recipients to active partners" through innovative, sound and lending practices.

"In fact, reports reaching us emphasise a positive impact the bank's operations continue to have on the people in our catchment areas."

Hajia Issah told the meeting that the bank continues to assist the communities as part of its social responsibilities adding that, last year, Bonzali Rural Bank donated 37.6 million cedis to support education in the Tolon/Kumbungu District.

The Northern Regional Minister, Alhaji Abubakar Saddique Boniface, in an address read on his behalf, commended the management and shareholders of the bank, saying, "Your vision and initiative has now blossomed into a giant with three agencies located in Tamale, Yendi and Gushiegu".

He congratulated the bank on its micro-finance programme, which he noted had assisted 5,000 women in its catchment areas since 1999. "By your gallant contribution, I can see that you are helping to reduce poverty in the region in line with government's policy of reducing poverty in the rural communities", he said. The Regional Minister urged the bank to help identify three economic ventures in its operational areas for exploration and development to reduce the poverty levels of the rural communities. Alhaji Wahab Suhuyini, the District Chief Executive appealed to the bank not only to concentrate on its core business of banking but also to address its social responsibility to the communities within its operational areas. The Board of Directors of the bank did not recommend any payment of dividends.