Bosomtwe Rural Bank to prioritize operational expansion

The Bosomtwe Rural Bank Limited at Kuntanase in the Bosomtwe District of the Ashanti Region has posted a satisfactory operational performance in almost all the financial indicators in the 2014 year under review.

The Board of Directors last year informed shareholders of the Bank’s operational expansion programme with the primary objective to make the Bank’s tailor made products available within the District in which they operate.

The Bank has therefore by this initiative opened Aputuogya Agency which has commenced business just about two days ago.

The Board of Directors have registered their appreciation to shareholders and customers of the Bank for their continuous support and patronage of the Bank’s services, helping management to attract more customers, due to its innovative products and esteemed customer services.

The Bank is also in the process of acquiring an office for business operation at Abuakwa in the Atwima Nwabiagya District for the relocation of the current Amanfrom Agency. This action is to harness the Bank’s business potential and to bring its products and services much closer to the customers of those localities.

The Chairman of the Board of Directors, Mr. Philip Bondah announced this at the 25th Annual General Meeting of shareholders held yesterday at the forecourt of the Bank at Kuntanase.

According to him, the Bank registered a very satisfactory growth in almost all the performance indicators in spite of the major economic challenges posed by local competition as well as the negative effects on the operations of the Bank.

He mentioned that the Prime Rate was raised from 19% at the end of September 2014 to 21% at the end of December 2014. Inflation rate also went up from 16.5% to 17% during the same period. However, rates of Government Treasury Securities remained stable except the 91-Day Treasury Bills which rose marginally from 25.45% to 25.81%.

The cedi remained stable during the fourth quarter against all the major trading currencies. It recorded marginal appreciation against all the currencies and ended the year at depreciation rates of 32.5%, 28.4% and 23.8% for the USD, GBP and EUR respectively. This compared with 32.6%, 31.8% and 27.0% as at the end of September 2014.

However, the expected recovery in the Ghanaian economy never happened. There was continued decline in economic activities from the previous year (2013). This was reflected in the significant deterioration in some of the macro-economic indicators. The managers of the economy had to revise the real GDP growth downward from 6.9% to 4.2%.

The economic pressure forced the Central Bank to increase the Policy Rate to 21% from 16%. This was against the backdrop of rising inflation which moved from 13.5% to 17.0% and its concomitant increase in Treasury Bills rate(s) from 17% to 25.8%. All these coupled with the high costs of Energy worked to adversely affect the cost of financing business, and relatively led to the decline in savings mobilization and ultimately the cost of banking operations.

Competition in the banking sector across the country and consequently, within the Bank’s catchment area became very challenging, as some Microfinance and other industry players increasingly made their presence felt, thereby breaking the Bank’s monopoly in some areas where they previously operated.

In spite of the challenges mentioned, the Bank, with more dynamic and strenuous efforts and good strategies, has continuously been making very progressive strides in terms of performance as shown in the table below.

The Directors have recommended dividend payment of GH¢0.021 per share for the year under review as compared to GH¢ 0.025 in 2013. This however represents a payment of GH¢217,640.76 as dividend compared to GH¢237,742.82 in 2013 and constitutes 27.82% of profit after tax for 2014.

The Bank continued to offer assistance to communities and institutions within its operational territories in terms of community development projects. A total amount of GH¢34,459.00 was spent in this direction and as part of the Bank’s corporate social responsibility.

The Board Chairman on behalf Directors of the Bank expressed his appreciation to all Stakeholders including the Bank’s Shareholders, Customers, and the entire Management and Staff of the Bank for their loyalty, commitment, support and contribution to the steady growth and progress of the Bank.

He pledged with the support of the Board to continue to manage the Bank on a sound corporate governance principles and behavior to achieve their desired objectives.