Shareholders vote out board member over loan default
The shareholders of the Ga Rural Bank Limited (GRBL) have, in a unanimous decision, voted out a board member for defaulting in a loan he took from the bank.
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Mr Samuel Oppong Mensah is said to have taken an overdraft of GH¢20,000 in 2013 and was supposed to pay by the end of August 2014.
However, he could not repay the amount which had accrued interest, bringing his debt to GH¢38,000. According to the bank, it was doing its best to collect every pesewa he owed it.
Consequently, Mr William Boadu, a chartered accountant based in Accra, has been duly vetted and elected to take the place of Mr Mensah.
This came to light at the 23rd annual general meeting (AGM) of the bank held at Amasaman, near Accra at the weekend.
Bank warns
Responding to some of the concerns of the shareholders, the Board Chairman, Nana Bram Okae II, issued a stern warning to board and management members who took loans from the bank and refused to pay on time.
Henceforth, Nana Okae said any executive member who might need a loan ought to provide a collateral which is convincing enough to warrant a loan.
That, he said, was one of the tight measures management had put in place to discourage board and management members from taking loans.
“A lot of the rural banks in the country have failed to function properly because some of their managers and board members take overdrafts and refuse to pay,” he stated.
Financial statement
The GRBL posted a profit after tax of GH¢4.3 million for the year ending December 2014, as compared to the GH¢4.5 million recorded in 2013. This indicates a decrease of four per cent.
The reduction in profitability, according to Nana Okae, was partly due to high cost of operation among other factors.
“As the case is, the economic meltdown also had a ripple effect on the bank, as debt collection became difficult and threatened its credit portfolio,” he said.
The annual turnover for 2014 was GH¢5.7 million, as against the previous year’s of GH¢4.3 million. This indicates an increase of GH¢1.4 million over the previous year’s, representing 33 per cent.
Total expenses recorded
Total expenses also increased by 38 per cent from GH¢3.8 million in 2013 to GH¢5.2 million during the year under review.
That, Nana Okae said, could be attributed to high staff costs, energy crisis and operating overheads.
“We continue to grow our shareholders funds over the years through retention of profits and attracting purchase of shares by potential shareholders,” he noted.
The board also recommended an amount of GH¢253,822 to be paid as dividend to shareholders as against the GH¢168,222 declared in 2013.
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Future prospects
The board chairman stated that plans were underway to open a microfinance company at Djanman-Pokuase.
“This is one of the initiatives we are taking as a bank to reach both the unbanked and underbanked to increase the fortunes of the bank,” he added.
On corporate social responsibility, the bank supported communities, institutions and projects in its catchment areas with an amount of GH¢34,500.