ARB Apex Bank says it is diversifying its income streams to increase profits and improve value for shareholders.
The bank recovered from a 2016 loss of GHS13.6 million to record profit after tax of GHS4.4 million Ghana in 2017.
The previous year’s set-back caused a depletion of the bank’s reserves in the face of declining interest rates.
Over 80 percent of the bank’s revenue comes from interest related activities which makes it overly sensitive to interest rate changes.
At the 16th Annual General Meeting in Kumasi, Managing Director, Kojo Mattah, said prudent management of our resources, has resulted in the performance.
“There are some decisions we took in 2016 that significantly accounted for the loss which is to support the rural and community banks in their communication cost and there was also some bailouts for the rural and community banks.
“We hope to continue with such actions so that ARB Apex Bank can return to winning ways and make more profits for future sustainability.”
Other financial indicators recorded as at December 31, 2017
The balance sheet grew by 19.1 percent from GHS273.9million in 2016 to GHS326.3million in 2017.
Total deposits grew from GHS231.9million in 2016 to GHS277.9 million in 2016, representing a growth of 19.8 percent.
Shareholders’ funds rose to GHS29.1 million in 2017 as compared with GHS24.8 million recorded in 2016, representing an increase of 17.3 percent.
Non Performing Loans
The quality of banks’ loan portfolio continued to be of grave concern.
According to the Bank of Ghana, the non-performing loans ratio which is a measure of the industry’s asset quality increased to 22.7 percent in December 2017 from 17.3 percent in December 2016.
Over half of these loans are in the loan loss category.
Corporate Social Responsibility
Despite the challenges it encountered, the bank continued to spend on corporate social activities.
In 2017, an amount of GHS43,300 was spent on several worthy causes, while the 2016 figure stood at GHS54,300.
Board Chairman of the Bank, Dr James Kwam Otieku, said because the bank is still recovering from the huge loss recorded in 2016, there is the urgent need for the bank to increase its capital base and this demands accumulation of profits over time.
“We do not propose the payment of dividends for the year under review”, he said.
Improvement in Service Quality
As part of this strategy, ARB APEX Bank has started the process to facilitate the rebranding and/or refreshing of all RCBs brands.
It is also developing a customer service standard, which would be shared with RCBs.
These two strategies will allow the bank to withstand competition from all angles.
“We believe this is key because, if our branches are standardised and our front-line associates (FLAs), have the requisite product knowledge and are customer-centric, customers would be happy walking into any RCB banking hall to access banking services.”