Nsoatreman Rural Bank records impressive growth

Nsoatreman Rural Bank PLC has reported an impressive financial performance for the year ending December 2023, with notable growth across its deposits, assets, and loan portfolios.

Addressing shareholders at the bank’s 34th Annual General Meeting, Board Chairman Daniel Hinneh highlighted the bank’s resilience, commitment to community-centered banking, and forward-looking strategies.

Despite slower GDP growth at 2.9%, lower than that of 2022 3.1%, economic stability was evident in inflation reductions and interest rate moderation. This environment supported Nsoatreman Rural Bank’s strategic financial initiatives, resulting in impressive increases in its total assets, shareholder equity, and profit.

Strong Growth in Deposits and Loans

Nsoatreman Rural Bank reported a 27.7% surge in total deposits, reaching GH¢51.85 million from GH¢40.6 million in 2022. This growth, driven by the bank’s innovative deposit mobilization strategies, reflects a deepened trust within the community and an expanding customer base.

Alongside deposit growth, the bank saw an outstanding 45.2% increase in its loan portfolio, raising total advances to GH¢16.79 million from GH¢11.56 million in the previous year. This leap can be attributed to tailored credit offerings, including new loan products for farmers, which allow for joint or individual guarantees to ease access to financing for the agricultural sector. The agriculture loan portfolio alone saw growth from GH¢2.67 million to GH¢5.15 million.

Financial Position and Equity Strengthening

Nsoatreman Rural Bank’s total assets saw a remarkable 26.8% rise, growing from GH¢46.57 million in 2022 to GH¢59.03 million by the close of 2023. This asset growth was primarily driven by strategic investments, which rose 42.9% to GH¢32.15 million. Additionally, cash and cash equivalents stood at GH¢5.63 million, reflecting the bank’s focus on liquidity management while balancing its long-term investment portfolio.

The bank’s equity position strengthened considerably in 2023, with total shareholders’ funds rising by 54.5% to GH¢3.59 million from GH¢2.32 million in 2022. This growth in equity was supported by an increase in statutory reserves to GH¢1.34 million and positive retained earnings, which improved from a deficit of GH¢580,835 to a much narrower negative GH¢39,879.

The bank’s total stated capital also grew, reaching GH¢2.02 million. The bank’s prudent approach to managing its liabilities, including reducing long-term borrowing from GH¢1.47 million to GH¢1.2 million, contributed to its financial stability and long-term sustainability.

Profitability and Compliance with Regulatory Directives

In a challenging year for many financial institutions, Nsoatreman Rural Bank reported a profit before tax of GH¢1.49 million, a 142.9% increase from the previous year’s GH¢615,405. This significant improvement reflects the bank’s strategic focus on profitable ventures and asset management while adhering to conservative risk management practices. However, in compliance with a Bank of Ghana directive, the Board decided not to distribute dividends to shareholders in 2023, retaining earnings to bolster the bank’s financial position.

Corporate Social Responsibility

Nsoatreman Rural Bank’s commitment to social responsibility was underscored in 2023, with the bank funding essential projects within its operational communities. These projects included the donation of furniture and facilities to local schools and the provision of menstrual hygiene products to junior high school girls, supporting educational advancement and health awareness.

On the technological front, the bank introduced Unstructured Supplementary Service Data (USSD) services, giving customers access to their accounts remotely, even on weekends. This move towards digital banking aligns with the bank’s commitment to accessible banking, allowing customers to perform essential transactions, including transfers to other rural and traditional banks across Ghana.

Future Outlook

The Directors’ report highlighted their ongoing commitment to responsible governance and transparency, with detailed responsibilities outlined for financial statement preparation, consistent accounting policies, and risk management. The Board also emphasized capacity-building initiatives, ensuring that Directors remain well-equipped with industry insights and regulatory knowledge to support strategic decision-making.

Reflecting on the year’s accomplishments, Chairman Daniel Hinneh expressed pride in the bank’s progress despite a challenging economic backdrop. He underscored the importance of continued shareholder support, particularly as the Bank of Ghana is expected to increase share capital requirements in the future. With its strong 2023 performance, Nsoatreman Rural Bank looks forward to furthering its mission of financial inclusion and economic empowerment within the community.

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