ADB posts significant half-year profit - Rolls out strategy to sustain growth
The Agricultural Development Bank (ADB) PLC has recorded a profit before tax of GH¢71.8 million in the first half of this year, compared to GH¢57.2 million during the same period last year.
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The performance for the first six months of 2023 highlights the progress the agriculture-focused lender has made following the severe impact of the Domestic Debt Exchange Programme (DDEP) on the financial sector, including the banking industry.
The bank attributed its gains in the face of a challenging operating environment to the new strategic plan introduced at the beginning of 2023.
Strategic plan
Highlighting the institution's resilience and commitment, the Managing Director of ADB PLC, Alhassan Yakubu-Tali, outlined the bank's strategic plan at the 2022 Annual General Meeting which is driving the growth agenda of the bank.
He said the plan affirmed the bank’s readiness to tackle the hurdles of the ever-evolving financial landscape while maintaining its legacy of success.
"The cornerstone of our competitive advantage lies in our history and our enduring relationships with our customers.
We are resolute in nurturing talent and generating opportunities through the dedication of our staff.
As we stride into the future, our unwavering focus remains on serving our customers and shareholders, and upholding the stability of the financial system," Alhaji Yakubu-Tali stated.
The key highlights of ADB's 2022 financial year were underscored, shedding light on both successes and challenges.
However, the bank's ambitions for 2023 are steadfast, guided by their new Strategic Plan titled "Going Above and Beyond the Predictable".
The Managing Director said the plan was to improve financial performance, enhance risk management and elevate customer service standards.
“ADB intends to provide unparalleled convenience, top-notch service and a diverse range of financial products via advanced electronic channels,” Alhaji Yakubu-Tali stated.
He added that efforts to streamline organisational functions and bolster accountability are in motion, with resources allocated strategically to value-generating activities.
Capital injection
Capital injection stands as a priority within the Strategic Plan.
ADB sees this as an opportunity to emerge fortified, ready to support governmental initiatives in the realms of manufacturing and agriculture.
The bank also aspires to contribute to a cash-lite system through projects such as the Ghanapay Gateway and paperless deposit initiatives, Alhaji Yakubu-Tali stated.
To reinforce its position in agribusiness financing and overall economic development, he said, ADB continued to forge partnerships with risk-sharing entities, notably the Ghana Incentive-Based Risk Sharing System for Agricultural Lending (GIRSAL).
With an agricultural sector loan portfolio surpassing GH¢1 billion, the MD said ADB Bank remained dedicated to its foundational mandate.
Embracing sustainable banking principles, Alhaji Yakubu-Tali said the bank was integrating environmental, social and governance factors into its operations.
“ADB aims to raise awareness through various programmes, aligning growth with responsible practices for sustainable returns,” the Managing Director stated.
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Cost optimisation
The cost buildup of banks is complex, interlinked and requires investment in order to reap.
With major cost lines which drive overall costs, ADB said it would continue to ensure optimisation.
“We ensure we get value for money for our investments in personnel and general operations.
We have instituted performance management systems to enhance efficiency,” the Managing Director indicated, adding that the bank was conscious of its cost-to-income ratio and the need to improve the income lines to take care of the costs.
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“I am also happy to report that our strategies are yielding the needed results and our cost-to-income ratio has reduced to 77 per cent as of June 2023 compared to 86 per cent as at June 2022,” Alhaji Yakubu-Tali said.
He added that the bank’s strategic plan also focused on customer convenience, which meant enhancing its digital platforms to facilitate remote banking, saying “the new order in banking requires the effective deployment of digital solutions”.
ADB Managing Director stressed that the bank would continue to modify and or introduce more products, including electronic banking products and services to provide convenience to customers.
“The bank has so far invested heavily in its digital transformation by setting up a digital transformation unit, beefing it up and acquiring new solutions to support service delivery,” he said.
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He said ADB Bank had also adopted a proactive approach to addressing cyber risks as it continued to deploy digital solutions.
Certification
The bank received a number of ISO certifications and attestations, including ISO 27001, which had been embedded in its systems and processes.
“For instance, ADB became the first bank to set up a security operations centre that monitors our cyber assets to ensure we identify all vulnerabilities and resolve same,” Alhaji Yakubu-Tali stated.
Additionally, he said, the bank had introduced change control processes and information security in all its digital project management by ensuring that “we identify all cyber risks in our IT-enabled business solutions before they go live”.
The Managing Director of ADB indicated that the bank would also dedicate time, effort, the required people and other resources to protect its cyber assets from any cyber attacks to ensure that customers and the business remained continually protected.
“As ADB embarks on its new strategic plan in a dynamic economic landscape; it has resolved to adapt, innovate and contribute to Ghana's financial stability,” Alhaji Yakubu-Tali stated.