Kumawuman Rural Bank strategises to build strong capital base and reserves after clean-up
The bank is also seeking to pursue liquidity as an immediate measure without neglecting profitability which will help build the Bank’s reserves and shareholders’ equity as well as boosting the general confidence of customers by focusing on direct banking relationship.
Kumawuman Rural Bank as part of the strategies to adopt to build strong reserves is seeking to also engage existing and potential shareholders to invest in the Bank’s shares, in order to match the Bank’s growth in deposits with the primary objective to boost the capital base of the bank.
The Bank will also concentrate its effort on effective measures in managing credit and other operational risks which will result in the reduction in none performing loans and other assets.
In all these efforts the Bank’s objective is to improve on performance and make its operations more attractive, become more transparent and make the governance practices more efficient and sustainable with the view to continuously increase the wealth of the shareholders.
These and more were contained in a speech delivered by the Vice Board Chairman Alexander Adomako Mensah at the Bank’s 27th Annual General Meeting of shareholders held yesterday at the forecourt of the Presbyterian Church at Kumawu in Ashanti.
According to him, the year under review was a very challenging one in the financial sector. The financial sector clean-up which led to the revocation of the licenses of some financial institutions, had negative impact on rural and community banks and Kumawuman Rural Bank is no exception.
Operational Performace
In spite of the many challenges faced by the Board of Directors and Management, they worked hard during the year under review, to raise Total Assets, Deposits, Paid-up Capital, Loans and Advances, Portfolio but recorded a drop in the Profits before Tax as shown in the table.
| Indicators | 2019 | 2018 | Change % |
| Total Income | 9,901,404 | 11,561,242 | (14.36) |
| Operating Expenses | 10,930,660 | 10,789,739 | (1.31) |
| Profit Before Tax | (1,329,364) | 590,249 | (225.22) |
| Deposits | 85,133,510 | 69,343,234 | 22.77 |
| Loans & Advances | 26,371,585 | 23,715,588 | 11.20 |
| Investments | 40,588,708 | 32,488,226 | 24.93 |
| Total Assets | 98,259,389 | 80,725,427 | 21.72 |
| Stated Capital | 2,904,785 | 2,845,512 | 2.08 |
| Shareholders’ Funds | 5,211,733 | 6,886,975 | (24.33) |
Dividend
In view of the BoG’s directive to all SDIs to desist from declaring dividends or distributing reserves to shareholders for the 2019 and 2020 financial years the Board of Directors did not recommend to members to approve the distribution of dividend for the 2019 financial year. The board has however assured shareholders that at the appropriate time, their investment will be rewarded.
Corporate Social Responsibility
The Bank continues to offer assistance to communities and institutions within its catchment areas in terms of community development projects and financial support which amounted to GH¢s49,293. The major economic areas that bene?ted include Education, Health, Sports, Recreation and Security.
2020 Achievement
The Acting General Manager of the Bank, Mr Prince Opoku Kusi in an interview with B&FT said the Bank’s business focus in 2020 is on driving growth, innovations, efficiency and service as the main pillars in achieving profitability.
He disclosed that the Bank had achieved very significant deposits figures with its deposit mobilization drive achieving and exceeding the huge targets they set for themselves. According to him the 2020 financial year will be the best year in the history of the bank.
He emphasised that the bank’s business model is still tailored for the Micro Small and Medium Enterprises and would push for more market penetration as they develop new and better products and ensure trusted relationships with clients of the bank.
The Ashanti Regional Manager of ARB Apex Bank, Mr George Annor on behalf of the Managing Director, Mr Kojo Mattah congratulated the Bank for the remarkable operational performance over the years.
He advised the Board and Management to institute risk management policy to identify, assess, monitor and control risks, since the banking business has become very competitive and risky.
The President of the Ashanti Chapter of Association of Rural Banks Mr Patrick Owusu addressing the shareholders of Kumawuman Rural Bank urged them to have confidence in the board and be advocates of the bank.
He further advised shareholders to increase their shareholdings with the bank and anticipate a long-term benefit with their investments.