Amenfiman Rural Bank shareholders get 35% of investment as dividend

• posts GH¢24m net operating profit
• shareholders pat board at the back

By Seth KRAMPAH, Wasa Akropong

Amenfiman Rural Bank PLC at Wasa Akropong in the Wasa Amenfi East District of the Western North Region has posted another remarkable operational performance in the 2023 year under review.

In the Bank’s recognition of solid financial performance in 2023 and the Board’s commitment to delivering value to shareholders, the Board has proposed a dividend of GH¢0.07 per share for 2023 financial year representing a return of 35% on the current share value.

This reflects the Bank’s strong profitability, financial stability and its consistent with its dividend policy set by the board to protect the investments of members and to consistently pay dividends.

The Bank recorded a pretax profit of about GH¢24million compared to approximately GH¢10.70 million in the previous year representing an impressive growth of 127 %. The Bank not only elevated its service offerings but also achieved remarkable strides in profitability, outshining many of its counterparts in Ghana’s banking sector.

In addition, the Bank’s Return on Equity rose to 13.6% in 2023, up from 13.3% the previous year, underscoring its utilization of shareholder equity to drive substantial profit growth.

The Bank’s profit margin experienced a robust and encouraging increase, propelled by the board and management strategic emphasis on meticulous cost management and a deliberate shift towards high-margin products.

While the average return on equity for the Ghanaian banking sector hovered around 15% in 2023, Amenfiman Rural Bank PLC achieved a remarkable return on equity of 23.03%, far surpassing its 2022 performance of 15.23%.

This impressive figure reflects not only the growth in both shareholder funds and profit before tax but also highlights the Bank’s exceptional ability to enhance these financial metrics. The Board’s strategic focus and operational excellence have allowed them to significantly outperform industry averages, demonstrating the Bank’s commitment to delivering outstanding value to their stakeholders.

The Chairman of the Board of Directors Dr Toni Aubynn who announced these and more at the Bank’s 40^th Annual General Meeting of Shareholders mentioned that the 2023 impressive operational performance was highly anticipated because of a workable strategy that was formulated and was pursued at the beginning of the year under review.

Operating Environment

According to him, Ghana’s economy for the year 2022 and 2023 reflected a complex landscape characterized by significant challenges, including high inflation, debt issues, and a struggling currency, but there were efforts to stabilize and reform the economy.

The economy experienced a 2.9 % growth in 2023, which is lower than the 3.8 per cent recorded in 2022. Inflation remained a significant challenge throughout 2023, from the 2022 peak value of 54.10 percent, with yearon-year rate reducing to 23.20%

Overall, 2023 was a year of navigating complex economic dynamics, with Ghana’s economy demonstrating both resilience and adaptability in the face of evolving global and domestic challenges. In the midst of the economic challenges, Amenfiman Rural  Bank positioned itself as the Bank of Choice for the Micro Small and Medium Enterprise by supporting micro and small businesses on the path to recovery.

Ghana’s banking sector navigated a landscape marked by significant opportunities and considerable challenges, showcasing a dynamic evolution in performance and strategic focus in 2023. Banks demonstrated notable resilience by fortifying capital positions and enhancing asset quality. This was evident as banks leveraged opportunities to reinforce financial stability and service delivery capabilities.

Operational Performance

In spite of the challenging macroeconomic environment coupled with the unprecedented occurrence of DDEP amidst high inflationary rate that pertained during the reviewed year, the bank confidently and comfortably pulled another remarkable operational performance in all key financial indicators.

Deposit

The Bank recorded extraordinary growth in deposits during the year under review, a testament to the strong trust and confidence customers have in the Amenfiman brand. Total deposits surged to GH¢768 million in 2023, from GH¢557 million in 2022, representing a 37.97% growth.

On the back of the growth recorded in 2023, the Board challenged management to an ambitious plan to achieve a Gh¢1 billion deposit by end of 2024, however the Bank achieved a Gh¢1 billion deposit at the end of July, 2024.

This achievement according to the Board Chairman is historic and unprecedented in the Rural Banking industry in Ghana and further cements Amenfiman’s leadership in the industry. Dr Aubynn further used the occasion to congratulate the hardworking employees and the esteemed customers for their loyalty.

Total Asset 

The Bank’s strong growth in deposits, loans and revenue reflected in more than Gh¢876 million balance sheet size at the end of the year 2023. The strong asset growth is a reflection of the strong leadership, effective management, and committed employees.

The Bank’s strategic plan is very much on course exceeding its plan targets way ahead of budgets. The Bank’s total assets increased from GH¢637 million in 2022 to GH¢876 million in 2023, a growth of 38%, driven by loan disbursements, investments and deposits.

The Bank’s credit portfolio saw significant increase, reflecting the focus on expanding credit facilities to support local businesses.

Stated Capital

The Bank achieved substantial progress in strengthening its capital base to support the growth plan while adhering to regulatory requirements. Stated capital rose from GH¢9.67 million to GH¢10.5 million in 2023 representing 8.60%. This growth in capital has further strengthened the capital base of the Bank making it strong and robust to pursue its strategic programs.

The Board Chairman reiterated that plans are in place to further increase the Bank’s stated capital through additional shareholder investments and possibly a public offering. The Board and Management of the Bank have adopted a proactive and strategic approach to capital management, ensuring that Amenfiman Rural Bank remains a robust and reliable institution for their customers and shareholders.

Corporate Social Responsibility

In the year 2023, a total of GH¢342,683.44 was spent on corporate social responsibilities. In line with the Bank’s strategy and social development agenda, the largest portion of this expenditure went to education where a total of GH¢183,450.00 was spent on bursaries, the Amenfi University project and renovation of basic schools within the Bank’s operational territories.

Awards

The CEO of Bank, Dr. Alex Asmah received the Steller Performance CEO’s award in 2023 for his contribution to driving the financial inclusion agenda of the country. He also received an award from Corporate Ghana CEO Trade and Industry Award as the most outstanding CEO within the Rural Banking industry which highlights his role in driving innovation and transformation within the bank.

Current State

Amenfiman Rural Bank is the undisputable leader of the rural banking industry in Ghana, recognized both locally in Ghana and internationally.  The total deposit is now in excess of Gh¢1.2 billion, by far the largest in the industry.

The Bank’s total asset is also more than Gh¢1.3 billion; Profit is close to Gh¢60 million and from a small branch network mostly in the Western Region, the Bank now has 21 branches with 100% branch viability.

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