The Agriculture Development Bank Ghana (ADB), in its 2021 financial report released by the bank, showed that it has tremendously reduced the instances of non-performing loans in the just ended financial year.
According to the report, ADB’s non-performing loans when calculated as a percentage of the bank’s gross loans have seen a downward trend, dropping by more than 3 percentage points.
Taking the last 3 years trend into consideration, the percentage of the non-performing loans was high in 2019, but it reduced in the following year, declining from 41.27 per cent in 2019 to 34.40 per cent in 2020 and further downwards to 31.21 per cent in 2021.
The report revealed that the amount spent on corporate social responsibility by the bank increased marginally from about GHC 4.025 million in 2020 to GHC 4.057 million in 2021.
ADB PLC Makes Profit
The Agricultural Development Bank continued its trend of profitability in the year 2021, after seeing its profit before tax rose by almost 30 per cent to hit GH¢126 million at the end of last year.
According to the bank, a strong growth in the banks’ net interest income and net fees, coupled with commission income, and among others, contributed to its profitability in the 2021 financial year.
ADB’s audited statement of comprehensive income for the year ended December 31, 2021, suggested that the Bank’s profit after tax increased by about 25 per cent from the GH¢ 65.4 million recorded in 2020 to the GH¢ 81.6 million recorded in 2021 financial year.
The report further stipulated that net interest income jumped from GH¢ 415.4 million in 2020 to GH¢ 480.3 million in 2021, while net fees and commission income jumped from about GH¢ 75.4 million in 2020 to GH¢ 91.2 million in 2021.
The growth in the banks’ profit is however moderate when compared to the over 400 per cent jump in the bank’s profit before tax recorded in 2020.
Another measure of ADB’s profitability, is that, its earnings per share also went up to 23.52 pesewas per share from 18.85 pesewas per share.
Total Assets Increase
The value of ADB’s total assets in 2020 stood at about GH¢ 5.7 billion. This jumped to about GH¢ 6.5 billion in 2021, representing a growth of about 13 per cent.
A closer look at the banks’ assets structure shows a marginal growth of about 8 per cent in its investment securities to about GH¢2.4 billion in 2021. Loans and advances on the other hand grew strongly by almost 20 per cent to hit about GH¢ 2.3 billion last year.
Moreover, the bank’s Capital Adequacy Ratio which establishes if it has enough capital on reserve to handle a certain amount of losses, before being at risk of becoming insolvent, continued to witness a drop, from 16.45 per cent in 2019 to 14.87 per cent in 2020 and further down to 14.49 per cent in 2021. Last years’ figure is below the banking industry average of 19.6 per cent as of February 2022, but above the current revised regulatory minimum of 13 per cent.