Avenor Rural Bank records 53% growth in net profit
The net profit of the Avenor Rural Bank in the Akatsi District in the Volta Region rose to GH¢295,412 in December last year from GH¢192,052 in 2014.
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This represents a 53.8 per cent growth in the bank's profit after tax within the 12-month period.
The growth in profit was as a result of corresponding growths in total income, gross advances and total deposits, which also impacted positively on the bank's assets for the period.
Its audited financial results for 2015, which were recently presented to shareholders at Akatsi, showed that total income rose from GH¢1.9 million in 2014 to GH¢2.5 million in 2015.
Similarly, total investments and deposits recorded 51 per cent and 33.5 per cent growth, respectively, to close last year at GH¢3.9 million and GH¢9.1 million.
Gross advances, which were GH¢5.2 million in 2014, also rose by 8.2 per cent to end the year under review at GH¢5.6 million.
The marginal rise in advances was due to a deliberate effort by the board and management to slow down growth in loans and advances, the bank's Board Chairman, Mr Simon N. K. Davo, told shareholders at the annual general meeting.
He explained that the decision was taken to insulate the bank and its operations from "harsh financial and economic conditions" in that year.
In December last year, the ratio of non-performing loans (NPLs) in the banking sector worsened to 14.7 per cent from the 11 per cent recorded in 2014.
Recapitalisation
Mr Davo said the bank raised its agency operations to seven in 2015 and was now aiming at opening another branch in Ashaiman "to serve the huge Ewe community living in the Tema Metropolis".
On statutory regulations, he said measures put in place by the board and management ensured that the bank met all the Bank of Ghana requirements within the period.
He mentioned the minimum capital, capital adequacy ratio and reserve requirements as some of the regulatory indices that the BoG team were satisfied with when they came for inspection.
He, however, reminded shareholders of the need for them to invest more in the bank to enable it to raise its minimum capital requirement to GH¢500,000 by December this year.
The GH¢500,000 is the new minimum capital for rural banks, which is expected to be met by December 2016 before a new round of recapitalisation, to the tune of GH¢1 million, takes effect.
Going forward, the board chairman said the Avenor Rural Bank would continue to improve efficiency in order to enhance shareholder value.
"Our strategy will be directed at marketing and customer service, staff training, deployment of information technology in our operations with emphasis on risk management and control," Mr Davo added.