Sonzele Rural Bank Posts Significant Profit
THE Sonzele Rural Bank continues to show strong performance as it posted significant profit before tax for the year ending 2016. The bank managed a profit before tax of GH¢770,455.00 representing 19.40 percentage increase over the 2015 figure of GH¢645,263.00.
This makes it the third consecutive period within which the bank chalked this success, in spite of the challenging economic environment in which it operates.
Addressing the 27th annual general meeting of the bank here yesterday, the chairman of the board of directors, Mr. Mathias Samwine said key performance area of the bank which included deposits, advances, investment, pre-tax profits, and share capital recorded GH¢10,417,556.00, GH¢2,002,522.00, GH¢8,937,043.00, GH¢770,455.00 and GH¢1,137,920.00 representing 10.84 percent, 3.42 percent, 13 percent, 19.40 percent and 28.08 percent respectively over that of 2015.
Mr. Samwine indicated that the net worth and total assets of the bank for same period stood at GH¢ 3,380,839.00 and GH¢ 15,348,096.00 represent 52 percent and 13.80 percent respectively.
He said the increase in the bank’s assets base was an indication that more resources were available for use to generate more income and therefore, create value for shareholders.
‘’The bank has increased significantly its advances to salary workers to brace their income to reduce rural poverty and improve income level and living standards in its operational area through a calculated but liberalizes credit delivery process without compromising any collateral/ security arrangements,’’ he emphasized.
Mr. Samwine noted that the bank slowed business in its short term investment portfolio thus resulting the marginal percentage increase of 13 percent, adding that this was to afford the bank enough funds to on-lend to customers as loans and advances.
Furthermore, he said the share capital of the bank witnessed a huge growth by 28.09 percent which was largely due to transfers from reserves to the share capital account as authorized by resolutions passed at previous AGMs.
He said in spite of the increase in share capital, there was still the need for shareholders to increase their shares by buying more shares and encourage others who have not yet bought shares of the bank to do so.
‘’The Bank of Ghana has directed that all rural and community banks in the country should grow their share capital to GH¢ 1,000,000.00 by the close of 2017 or merge with other rural banks. Fellow shareholders, it is my considered view in all humility that the best alternative is to raise more capital through sale of shares to meet the set target instead of a merger,” he emphasized.
Touching on the bank’s corporate social responsibility he said, ‘’wherever Sonzele operates, your bank has been driven by a philosophy to be a partner of those communities. Towards this, we have contributed in diverse ways to communities where we serve. Contributions have gone into sponsoring festivals which has helped keep our culture alive and preserved.’’
The board chairman explained that apart from contributing towards festivals in the district, the bank had also sponsored the educational, agricultural, water and sanitation, sports and health needs of those in the communities.
On the challenges that confronted the bank during the year under review, he said the frequent collapse of some micro-finance companies in the catchment area of the bank and beyond dampened public confidence in the banking system and thus affected deposit mobilization.
On his part, the manager of the Wa branch of the Apex Bank Mr. John Kwaku Nyamador said the rural banking industry was confronted with numerous challenges’ which included; high operating cost, high loan default and strong competition from micro-finance companies as well as universal banks.
He said it was therefore imperative for the bank in addition to the policies they already have in place to sustain the operations of the bank in the face of stiffer competitive environment.
“The bank should continue its strategy to slow down on granting loans and advances to clients, but must ensure that proper appraisal and due diligence are carried out before granting loans,’’ he added.