The Builsa Community Bank Limited (Bucobank) in 2015 recorded a profit before tax of GH¢ 708,621, representing a decrease of GH¢ 86,432.00 (10.9 per cent) from the previous year’s performance.
Naab Akanab Apoom-Ween, board chairman of the bank told the 16th annual general meeting at the week-end in Sandema that the reduction in profitability is associated with the general increase in operating cost.
The chairman’s statement, made available to the press in Accra, said the board recommended a dividend per share of GH¢ 0.0375 for payment to shareholders.
This amounts to a total of pay-out of GH¢ 195,646.20 (30 per cent of the after tax profit for the year 2015). The board proposed that shareholders will approve the use of 75 per cent of their respective net dividend to buy more shares in the bank.
Naab Apom-Weem said the bank adopted a more sustainable strategy in the wake of the uncertainty in the business environment, and to ensure the protection of depositors’ funds against the risk associated with high yielding investments in loans and advances, the board decided on investing more in risk free assets in short term investments which comes with lower returns in the end.
He said the bank grew its balance sheet size by 30.5 per cent to close the year with an asset base of a little over GH¢ 18.62 million.
The growth in the assets of the bank was propelled by a 75.8 per cent growth in short term investments as well as 54.1 per cent growth in property, plant and equipment. Cash on hand plus balances with other banks also increased by 23.7 per cent to GH¢ 1.73 million at the close of the year under review.
The increase in assets was funded mainly from increases in customer deposits and borrowings. Customers deposits for 2015 increased by 29.7 per cent to GH¢ 13.57million.
The total borrowings from Ecobank Ghana Limited, ARB Apex Bank, REP and IFAD amounted to over GH¢ 1.38million representing a growth of 139 per cent over the previous year.
The Bucobank Board Chairman said considering the general economic environment in 2015, a profitability of GH¢ 708,621.00 delivered by the Bank is no mean achievement notwithstanding the 10.9 per cent reduction from the last year’s figure.
In the year under review, operating income was GH¢ 2.88million, representing a growth of 15.5 per cent over previous year’s figure of almost GH¢ 2.49million. The growth in operating income was as a result of a 17.6 per cent growth in net interest income from GH¢ 2.12million in 2014 to GH¢ 2.49million in 2015.
Growth in Commission and fees on the other hand was below expectations partly due to the competition posed by the mobile money services offered by the various telecommunication companies in the country which greatly affected the commission earned on the Apexlink domestic money transfers. Fees and commissions grew marginally by 3.61 per cent from GH¢ 379,030 in 2014 to GH¢ 392,700 in 2015.
Naab Apoom-Weem said loans and advances remained the biggest item of the bank’s total assets during the period under review, and announced that they increased by 6.6 per cent from GH¢ 8.12million in 2014 to GH¢ 8.66 million in 2015.
He was hopeful that the measures would accelerate the bank’s ability to mobilise the minimum capital of GH¢ 1 million by the end of 2017.