Agricultural Development Bank says it has has implemented a robust liquidity management framework and contingency funding plan that builds in adequate buffers to support liquidity run-off in a stress scenario.
The liquidity ratio of the financial intermediary as of 31 December 2020 was 117.76% and the bank projects that it will remain above the internal limit of 40% and the regulatory limit during the crisis period.
Also, the Bank’s foreign currency open positions are expected to remain within tolerable limits in line with its risk appetite.
Board Chairman, Alex Bernasko addressing shareholders of the bank at its Annual General Meeting (AGM) said all the relevant indices in 2020, presenting a positive outlook and also providing basis for the bank to climb up three places from the 20th position to 17th position in the ranking of banks in 2020.
The board reviewed and adopted a revised Three-Year Strategic Plan (2021-2023) for the Bank. The exercise afforded management and the board the opportunity to rethink the reason for the bank’s existence and to redefine its mission and vision statements, strategic objectives and core values to bring them more in alignment with the bank’s ‘raison d’être’.
Mr. Bernasko said the reviewed strategic plan, which spans the period 2021 to 2023, provides, among other things, the guidance to influence the bank’s current operating model and the changes that will ensure its sustainability and growth, adding, KPIs and metrics for their measurement have been developed into effective dashboards for monitoring and evaluation.
ADB posted profit of ¢65.4 million in 2020
ADB registered a profit of ¢65.4 million compared to ¢14.9 million in 2019. This represented over 400% growth in performance in 2020, occasioning a Return on Equity and Return on Assets of 7.69% and 1.14% as against 1.87% and 0.32% respectively in 2019.
The size of the balance sheet experienced a significant growth over the year from ¢4.6 billion in 2019 to ¢5.7billion in 2020 (24%) bolstered in part by improved holdings in investment securities in line with its strategic objectives.
The Non-Performing Loan portfolio of the bank witnessed significant reduction from 41% in 2019 to 34% in 2020.
Its target is to bring the NPL ratio within industry brackets by 2023. Average industry NPL ratio is 17.5%
Deposits grew by 26% from ¢3.4 billion in 2019 to ¢4.2 billion in 2020.
By the end of 2020, the capital adequacy ratio and the Basel Committee inspired capital requirement directive were 16.5% and 14.5% respectively, both above the minimum regulatory.
No dividend payment
Despite recording a substantial profit in 2020, the directors of the bank did not recommend the payment of dividend.
They however consider the state of the bank‘s affairs to be satisfactory.
The bank now has Financial Investment Trust as its majority shareholder with 64.05%, whilst the Government of Ghana and the Ghana Amalgamated Trust PLC owns 21.50% and 11.26% as the 2nd and 3rd majority shareholders.
Together, they control about 96.81% of the bank.
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