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Shareholders Fund Increased

2007-08-06 13:06:09
This article has been read 880 times.

Profit before tax of Bonzali Rural Bank in the Tolon/Kumbungu District dropped from 1,318,333,347 cedis in 2005 to 891,724,407 cedis in 2006, representing a 32 per cent drop.

The shareholders’ Fund, however, increased from 4,585,377,856 cedis in 2005 to 5,365,549,827 cedis in 2006, an increase of about 17 per cent.

Alhaji Mahdi Abdulai, Chairman of the bank’s Board of Directors, said this in his report at the fifth Annual General Meeting of the Bonzali Rural Bank at Kumbungu .

Alhaji Abdulai attributed the decline to the break down of the bank’s internal control system, saying: "There was a lot of irregularities and the Board had to contract an external auditing firm to clean the books thereby increasing office expenses".

Additionally, he said: "All the executive management members were employed in 2006, bringing the staff strength from 38 in 2005 to 49 during the year under review thus increasing salaries and allowances".

The Board Chairman told the meeting that the Board did not recommend the payment of dividend this year since it had an ambitious strategy to substantially increase the shareholder value in the shortest possible time.

"The strategy would require the commitment of a lot of funds. In the meantime, the Board is in the process of allocating 481,000,000 cedis as bonus to shareholders."

Alhaji Abdulai said bonus shares were a requirement of the Bank of Ghana to increase the stated capital of the bank to 500,000,000 cedis.

Alhaji Abdulai said the year under review was one of great changes and achievements.

The bank decided to open two new agencies at Lamashegu in the Tamale Metropolis and Nyankpala in the Tolon/Kumbungu District.

It introduced three new products; "Walma Savings Scheme, Hajj Savings Scheme (for prospective pilgrims) and the Fixed Deposit Receipt.

He said while the Walma scheme was doing well, bagging a little over one billion cedis within nine months (from October 2006 to June 2007), the other two schemes were yet to pick up.

The Board Chairman announced that the chief of Kumbungu had offered the bank land to build its head office in the town.

He said the Board had therefore resolved that 20 per cent of profit bank would declare every month should be set aside as "Head Office building fund".

Alhaji Abdulai said with strategies the Board had adopted there was every indication that the bank would have a promising 2007.

He said the commissioning of the two new agencies and the effective and efficient marketing of the bank’s three new products would be given prime attention to boost income generation and thus higher shareholders value.

source: GNA

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