30TH ANNUAL GENERAL MEETING – CHAIRMAN REPORT

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Distinguished Shareholders, all protocols observed. On behalf of my fellow Board of Directors, I am very much delighted to welcome you all to the 30th Annual General Meeting of our bank and to present to you the financial report as at 31st December, 2017.

ECONOMIC REVIEW

The year 2017 commenced the administration of a new government after the 2016 election. The peaceful political transition meant democracy is entrenched in Ghana and this stability provided confidence and regulatory predictability. The introduction of new policies and programmes therefore   spurred a resurgence in the economy by the second half of the year with improvements in the microeconomic fundamentals and a boost in the private sector participation. Estimated GDP growth for instance was 9.3% as at September 2017, up from the original forecast of 6.3%.

Inflation continued to decline during the year to end the year at 11.8% from 15.4% in December 2016, creating the avenue for Banks in Ghana to reduce its policy rate from 25.5% to 20.0%.The 91-day Treasury bill rate also declined to 13.3% compared to 16.8% the previous year of 18%.

The Ghana Cedi cumulatively depreciated by 4.9% compared to 9.7% in 2016. The estimated growth rate for the Ghanaian economy was 7.9% by end of 2017 as against 2016 performance of 3.7% . This was due to boost in oil production.

The fiscal deficit for the first half of 2017 was 2.7% of GDP while revenues underperformed at 14.9% below their target. This underperformance was reversed in the second half of 2017 as policies, announced in the first quarter, took effect. Government cut back on both recurrent and capital expenditure kept its fiscal consolidation programme on track.

Headline inflation was 11.8% at the end of December 2017 compared to 15.4% in 2016. The reduction created room for monetary policy easing, and Bank of Ghana cut the monetary policy rate by a cumulative 550 basis points from 25.5% in 2016 to 20% by end of 2017.

The performance of the banking industry in Ghana was resilient in the year, despite pressures from a very large energy sector debt. The industry’s high Non‐Performing Loan (NPL) levels remained the major driver behind the high lending rates and the industry’s restricted credit stance. To strengthen the financial sector and foster economic growth, the Central Bank increased the minimum operating capital for universal banks from GHS120m to GHS400m. Rural banks capitalization however, was maintained at         GHS 1,000,000.00 by end of December, 2017.

OPERATIONAL RESULTS AND FINANCIAL PERFORMANCE

Ladies and Gentlemen, I am glad to inform you that our bank recorded yet another impressive performance despite the challenges of redundancy exercises carried out by major mining companies within our catchment, issues of small scale mining and poor yield in cocoa farms produce. Indeed, these challenges impact significantly on the local economy and our bank.

PROFIT BEFORE TAX

Our bank recorded a pre- tax profit of GHS 5,457,966 in the year under review as against GHS 4,448,142 in 2016. This represented a positive percentage growth in profit before tax of 23%.

SHARE

Ladies and gentlemen, following a resolution passed at the last AGM on 27th May, 2017 for the issue of bonus shares to existing shareholders who were on the share register as at 31st December, 2007, a total capitalization for bonus amounting to GHS 682,459, and representing 8,530,738 bonus shares were shared for 10,631,928 qualifying shares. This meant that every qualifying share was entitled to 0.8024 of a share under the bonus share issue.

The bank’s share price remained at GHS 0.20 per share.

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