Nkrankwanta Area Rural Bank records growth

The Nkrankwanta Area Rural Bank in the Dormaa-West District of the BrongAhafo Region last year posted a strong performance despite macro-economic challenges coupled with sluggish growth in the cocoa industry, which is the main economic activity in the operational territories of the Bank.

Total assets of the Bank went up from approximately GH¢1.6million in 2011 to about GH¢2.7million in 2012, representing an increase of 68%. The bank’s 2012 investments saw a 67% increase to GH¢1,420,000 from the GH¢850,000 of the previous year. Short-term lending to government investments, especially in Treasury bills, remains the major income source for the bank.

The bank registered a marginal 6% growth in pre-tax profit, from a little over GH¢60,000 in 2011 to about GH¢63,000 during the year under review.

Edmond Joseph Akomian, Chairman of the Board of Directors who announced this during the 4th Annual General Meeting of shareholders, attributed the small growth of the Bank’s profit to the low rate of Treasury bills, increased computerisation of its agencies, and poor performance of the special Akuafo Cheque system.

Numerating some operational challenges, he mentioned the failure of loan beneficiaries to repay credits on maturity as the major constraint and passionately appealed for loan defaulters to endeavour to reimburse their debts on schedule to avoid being blacklisted and also help others to access loans in time of need.

The ever-growing stiff competition emanating from the proliferation of non-Bank financial institutions like Credit Unions, Microfinance Institutions as well as Savings and Loans Companies which hitherto were not visible in the catchment area of the Bank, he admitted, is a colossal threat to its deposit mobilisation drive -- but was quick to add that the Board and Management are working assiduously to ward off that operational threat.

Mr. Akomian said as a result of the aforementioned challenges coupled with other difficulties, the Board could not recommend payment of dividend for 2012 -- but has however recommended a bonus issue of an additional two (2) shares for every ten (10) shares for free. This, according to him, will increase their holdings as compensation of non-payment of dividends.

The bank could not do much with regard to social responsibilities, but the Board Chairman said it donated a quantity of lumbers and nails to support construction of the Nkrankwanta Presbyterian K.G. School block.

He announced that the Bank has secured a loan facility for the construction of a befitting head-office, and the project is expected to be completed in 18 months.

The bank’s share capital is now pegged at GH¢179,201 -- an improvement over the 2011 figures of GH¢151,112. Mr. Akomian therefore urged the shareholders to redouble their efforts since the minimum capital requirement of RCBs has been reviewed upward by the Bank of Ghana.