ADB made a profit after tax of GH₵65.4 m in 2020 despite Covid-19

Agricultural Development Bank (ADB) has made a profit after tax of GH₵65.4 million in 2020 compared to GH₵14.9 million in 2019, despite the adverse impact of the global pandemic.

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% in that order respectively.

This came to light when the bank held its 34th annual general meeting (AGM) recently.

The meeting also gave shareholders the opportunity to consider, appoint and re-elect new directors while approving the remuneration of directors at the bank.

Addressing the shareholders, the Board Chairman of ADB, Mr Alex Bernasko, indicated that the size of the bank’s balance sheet experienced significant growth over the year from GH₵4.6 billion in 2019 to GH₵5.7 billion in 2020.

“We saw 24% bolster in part by our improved holdings in investment securities in line with our strategic objectives, just as we saw an expansion of 30% in net loan assets from GH₵1.5 billion in 2019 to GH₵1.9 billion in 2019,” he stressed.

Mr Bernasko also added that the non-performing loan (NPL) portfolio of the bank witnessed a significant reduction from 41% in 2019 to
34% in 2020.

“Our target is to bring the NPL ratio within industry brackets by 2023,” he noted.

Growth in deposit
The board chair noted that deposits for the year under review grew by 26% from GH₵3.4 billion in 2019 to GH₵4.2 billion in 2020.

He explained that an intricate analysis of the financial performance of the bank showed that it improved in every sphere, adding that interest income saw a growth of 28% from GH₵419.2 million in 2019 to GH₵628.9 million in 2020 whilst gross non-interest revenue also increased by 12% to GH₵158.7 million in 2020 compared to GH₵141.8 million in 2019.

Ensuring corporate governance
The board chairman indicated that in efforts to keep directors abreast with new trends in the banking industry landscape, corporate governance certification training was organised for directors.

The ADB Board, thus, reviewed and adopted a revised three-year strategic plan (2021-2023) for the bank.

This allowed management and the board 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 purpose.

“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,” Mr Bernasko noted.

He stated that all the relevant indices of the bank presented a positive outlook providing a basis for the bank climbing up three places from the 20th position to the 17th position in the ranking of banks in 2020.

Profitability increased due to strong performance
Managing Director of ADB, Dr John Kofi Mensah also noted that the increase in profitability was driven by strong performance in treasury and credit operations funded by an aggressive deposit drive.

He indicated that the net interest income, which was GH₵415.4 million for the year ended December 31, 2020 was an increase from GH₵300.1 million in 2019. This, he noted, represented a 38.42% increase.

“This was mainly driven by booking quality loans and the effective monitoring of the loan book,” he noted.

Refocusing on agriculture mandate
Dr Mensah indicated that in line with the bank’s strategic objective to increase the agricultural loan portfolio to 50% of the bank’s total loan portfolio, the bank in 2020 deepened its financial intermediation to players in the agricultural value chain.

Out-grower Support Scheme
The managing director noted that in the year under review, the bank also embarked on an out-grower financing scheme to support local raw material-based industries and processing factories. He noted that these were in the areas of cereals, vegetables and tree crops.

He spoke on the company’s commitment to continue to create employment in each of the regions where the scheme would be implemented.
“We will secure the capital of the bank and human capital to make sure we are prepared to absorb shocks such as another global pandemic,” he said.

Despite these achievements, Dr Mensah said the bank had more to do to embrace the opportunities to achieve a state of excellence in assisting their clients.

Appointment of directors
Shareholders at the general meeting confirmed the election of the Kwahuhene and President of the Kwahu Traditional Council, Daasebre Akuamoah Agyapong II, a Ghanaian politician, Alhaji Habib Iddrisu, and a professor of Plant Genetics, Prof Eric Yirenkyi Danquah, as the new directors of the ADB Board.