Shareholders of Atwima Kwanwoma Rural Bank have something to smile about as they enjoy 11.7 percent increase in dividend for 2016.
From 8.5 pesewas per share in 2015, the bank approved 9.5 pesewas per share for 2016.
The approval comes despite a drop in the bank’s profit after tax from nine million Ghana cedis to about six million Ghana cedis over the period.
Officials attribute the slip to increased corporate tax from 8 percent to 25 percent.
Board Chairman, Patrick Owusu says authorities must reconsider their decision on the 25 percent tax and reduce it.
“We are not saying that we don’t want to pay taxes, but what we are saying is that the quantum of increase is too much and we are pleading with the government to reduce it for us because we use a chunk of our profits in corporate social responsibilities,” he said.
He spoke to Luv Biz at the 34th annual general meeting of shareholders in Kumasi to present the 2016 financial year statement.
Meanwhile, the association of rural banks says it is working on addressing the high corporate tax and its effects on its members.
Chairman, Nana Dr. Akowua Boamah describes the current situation as crippling because it will be difficult for some of its members to meet their financial obligations like the capital requirement.
“This is crippling because how many of the rural banks are making so much money and at the same time We have to meet our capitalisation problems.
"And we have to make sure our shareholders get dividends, we have to attract more shareholders. You can attract more shareholders when you have so much profits and the dividend is high,” he said.
According to him, when a company has to give one-quarter of its profit to the government then, it becomes very difficult to meet some of its obligations.
“As at this time, if we continue to saddle rural banks with this tax, it will be difficult for them to grow”.
Chief Executive of the bank, Sarfo Katanka revealed the bank’s plans to employ more technology to enable the banks to stay competitive in the industry.
Meanwhile, the bank’s investment portfolio grew from about 63 million cedis to 79 million cedis, with deposits appreciated by 20 percent.