By: Fred Yaw Sarpong
UT bank’s revenue lines
remained strong in 2013. The bank’s interest income was GHc188 million,
representing a 40% increase from the previous year, while non-funded income
increased from GHc43 million to GHc53 million.
However, the 60% growth in
interest expense, attributed to the higher average rate on government
securities, negatively affected the bank financial performance. Total income
increased by 19% to GHc125 million, a comparatively slower growth.
The Chairman of the bank, Mr.
Joseph Nsonamoah announced this at the bank’s 2013 Annual General Meeting (AGM)
held in Accra. The AGM was to consider and adopt the statement of account of
the company for the year ended 31st December 2013 together with the reports of
the directors.
Mr. Nsonamoah noted that ‘given
the negative impact of the tough economic conditions on our customers’
businesses, the bank took a more prudent stance with regard to our
provisioning. We consequently increased the charge for doubtful debt to GHc24
million, an increase of 83%. The aforementioned resulted in a profit before tax
of GHc13.4 million in 2013, representing a 48% drop compared to the previous
year.
He stated that in December
2013, the bank received US$10 million from Amethis Finance, a Paris based
private equity firm dedicated to investing in Africa. ‘The funds supported our
capital, enabling us to close the year with a capital adequacy ratio (CAR) of
12.2%, marginally above the Bank of Ghana (BoG) required minimum,’ he added.
He said the bank also received
medium term debt funding from reputable companies such as the African
Development Bank (AfDB), European Investment Bank and Ability Global
Microfinance Funds. ‘We are happy to build relationships with institutions such
as these who like us, support the growth of the SME sector,’ he added.
Prince Kofi Amoabeng, the Chief
Executive Officer (CEO) told the shareholders that their bank assets crossed
the one billion mark to GHc1.34 billion, up by 35% compared to 2012. According
to him loans and advances continued to be the dominant asset line and grew by
35% to GHc917 million.
‘We however improved the
structure of our assets, investing more
in liquid interest earning assets by growing our short term investments by 95%
to GHc120 million. Short term investments therefore accounted for 9% of total
assets compared to 6% in the previous year,’ said Mr. Amoabeng.
On the liabilities end, Mr.
Amoabeng noted that the bank’s deposits grew by 15% to GHc920 million. Total
current and savings accounts amounted to GHc289 million, compared to GHc333
million in 2012. ‘Attracting cheap deposits was a challenge for most banks
during the year, particularly due to the change in regulation, which allowed
non-bank financial institutions to hold deposits. We therefore had to rely on
growing our expensive deposits to sustain our business,’
He mentioned that they have invested heavily
in their e-business platform and expect that this will translate into faster
and simpler services in 2014.
He said the introduction of the
mobile banking platform will serve as a foundation for implementing other
branches and agency banking products. ‘The import of these to our business
cannot be overemphasized in the light of the need for growth in cheap deposits.’
As part of their expansion
drive they have commercial operations on Tamale, Suame, North Industrial Area,
and East Legon. The East Legon branch is the bank’s first virtual branch,
providing 24 hour service. The branch will also house the newly created Private
Banking and Wealth Management Units.
The board of directors of the
bank took a tough decision not to pay out dividend in respect of the financial
year ending 31st December, 2013.
‘Supporting our capital
adequacy is essential for our operation as a lending bank, and a dividend payout
would negatively affect this. Our financial performance over 2013 is only
temporary and I ask that, we as shareholders will grant the bank every support
during this period,’ early said by the Chairman of the bank.
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