Akuapem Rural Bank records impressive operational performance

• makes significant impact in Credit with Education
• shareholders get dividend payment of GH?0086 per share

Akuapem Rural Bank PLC at Mamfe in the Akuapem North District of Eastern Region has demonstrated resilience and achieved remarkable financial growth across all financial indicators.

The Bank disbursed loans and advances totaling approximately GH?112.4million for the year 2024 under review with a little over GH?60.3 million going to the Credit with Education (CwE) Scheme of the Bank’s Microfinance operations representing 49.93%.

The Credit with Education program is for women that makes up 359 groups with 5267 clients. The Bank’s Loans and Advances Portfolio saw an increase of 29.01 % in 2024 compared to 53.54% in 2023 with portfolios with a little over GH?54.9 million in 2024 and GH?42.5million in 2023. The CwE loans form 24.5% (GH?13,874,317) of the Bank’s total loan portfolio with an impressive NPL of 0.13%.

The Directors have proposed a cash dividend payment of GH?0.0086 per share to shareholders amounting to GH?1,347,857 for the 2024 financial year which represents 35% of profit after tax and which has been approved by the Bank of Ghana.

It is the hope of the Board of Directors that the Bank’s performance will continue to improve and move towards such a positive direction to enable the continuous payment of Dividend in the years ahead.

The Bank’s Net Interest Income increased from about GH? 24.4million in 2023 to a little over GH?35.2million in 2024 representing 44.67% over the previous year. The increase is as a result of the growth in loan portfolio, investment portfolio and interest rate on treasury bills and fixed deposits.

The Bank’s Operating Expenses increased from about GH? 22.3million in 2023 to approximately GH? 31.7million in 2024, representing an increase of 42.37%. The cost centers which contributed significantly to this were staff cost and general administration expenses; recording a post-tax profit of approximately GH? 3.85million in the year 2024 under review representing a significant growth of 186.1% over the previous year’s GH? 1.34 million.

Chairman of the Board of Directors, Dr Ernest Obuobisa-Darko announced these and more at the bank’s 43rd AGM of shareholders held last Saturday at the Assembly Hall of Methodist Girls’ Senior High School at Mamfe in the Eastern Region.

Operational Environment

According to him, Ghana’s economic activity was stronger with higher-than-projected growth in the first three quarters of 2024. The latest data from the Ghana Statistical Service showed that real GDP expanded at an annual rate of 6.3 percent during the first three quarters of 2024, relative to 2.6 percent during the corresponding period in 2023. Nonoil GDP grew by 6.2 percent from 3.3 percent over the same comparative period.

Prices of the major export commodities on the international commodities market traded mixed in 2024. Cocoa prices rose sharply to US$10,869.10 per tonne in December 2024 from US$4,235.60 per tonne in December 2023, on the back of reduced supplies due to adverse weather conditions which affected top producers such as Cote d’Ivoire. Gold prices increased by 29.4 percent to US$2,641.50 per fine ounce in December 2024 from US$2,035.40 per fine ounce a year earlier.

In contrast, crude oil prices fell by 5.3 percent year-on-year to settle at an average price of US$73.20 per barrel in December 2024, following concerns over supply risks and the prospects of increased supply in 2025.

Private Sector credit growth continued to increase towards pre-2022 macroeconomic crisis levels, albeit slowly. Nominal growth in the private sector credit increased to 26.3 percent in December 2024 from 10.7 percent recorded in the corresponding period of 2023. In real terms, credit to the private sector increased by 2.0 percent relative to a 10.2 percent contraction recorded over the same comparative period in the previous year.

The banking sector continues to be profitable, well capitalized and liquid. Assets of the banking sector grew by 33.8 percent in 2024. Capital Adequacy Ratio (CAR) with reliefs grew marginally to 14.0 percent in December 2024 from 13.9 percent in December 2023.

However, CAR without reliefs rose to 11.3 percent in December 2024, higher than the 8.3 percent recorded in December 2023. Profits went up in 2024 compared to 2023, but the pace of growth slowed, resulting in the moderation of profitability indicators during the period.

In the outlook, elevated credit risk remained the main upside risk to the banking sector. The industry’s Non-Performing Loans (NPL) ratio increased to 21.8 percent in December 2024, up from 20.6 percent in December 2023.

Operational Performance

In spite of the challenging macroeconomic environment coupled with the high inflationary rate that pertained during the reviewed year, the bank pulled yet another remarkable operational performance in all key financial indicators as indicated in the table.

Corporate Social Responsibility

The Bank continues to provide support to various state institutions and stakeholders within its catchment areas. Some projects supported within the bank’s catchment areas during the year under review included that of the Traditional Councils, Ghana Education Service (GES), the Ghana Police Service, some government health facilities and support for Farmers’ Day Celebration. The Bank spent an amount of GH? 163,555.00 in this direction.

The Board Chairman has stressed that the bank is socially responsible and would continue to support projects and engage in environmentally friendly activities in the years ahead.

The Deputy Managing Director of ARB Apex Bank, Curtis Brentuo Esq. who delivered an address on behalf of the Managing Director, Alex Kwasi Awuah, congratulated the shareholders, Board, and Management of the Bank for the exceptional performance of the Bank.

He reminded the board that the pilot phase of the Agency Banking implementation has been effectively concluded. He further encouraged rural and community banks to begin the deployment of third-party Point of Sale devices.

The Managing Director expressed his confidence that the project will serve as a significant revenue generator for rural and community banks as well as offering true convenience to their esteemed customers.

Future Outlook

The Chief Executive Officer of the Bank, Kingsley Kyere, in an interview with Business & Financial Times said the Bank would continue to put in pragmatic measures to ensure positive growth and achievement of the Strategic Plan of the Bank.

He stressed that the Bank would intensify loan recovery, embark on intensive deposit mobilisation, strengthen internal controls and maintain quality assets to increase profitability.

He has also emphasised that the Bank’s business focus in 2025 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.

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