Agricultural Development Bank posts Ghs 55.7 million profit for Q2 2021
State-owned Agricultural Development Bank (ADB) for the second quarter of 2021 posted a profit-after-tax of Ghs 55.7 million.
The recorded profit is an increase of some Ghs 25 million when compared to the Ghs 30.9 million recorded as profit for Q2 2020.
For shareholders’ the profit translates into some 21 pesewas to be paid as dividends per share.
For the review period, the bank’s total assets grew by some Ghs 1.3 billion, this was as a result of increment in the bank’s investment securities occasioned by the pandemic, loans, and advances to customers as well as cash and balances.
ADB’s total assets value as of the end of Q2 2021 was Ghs 6.1 billion from Ghs 4.8 billion in Q2 2020.
In terms of liabilities, the bank ended Q2 2021 with a total liability of Ghs 5.2 billion, some Ghs 1.2 billion up from the total liability of Ghs 4 billion recorded at the end of Q2 2021.
Shareholders’ funds per the bank’s Q2 2021 Unaudited Financial Statement stood at Ghs 906 million up from Ghs 824 million in Q2 2020.
Read: Central Bank of Nigeria bans sale of forex to BDCs
Meanwhile, ADB for the period under review posted a Non-Performing loan (NPL) ratio of 31 percent to total loans made.
The recorded NPL at the end-June 2021 which is almost twice the banking industry’s average of 17 percent indicates a significant deterioration in the bank’s loan asset quality.
Surprisingly, the current 31 percent NPL is an improvement on a 38 percent NPL recorded at the end of the second quarter of 2020.
Of the 31 percent NPL, the loan loss provision category accounted for 17 percent.
It is unclear what actually has accounted for the surge in ADB’s NPL, but one can always partially attribute the surge in the bank’s NPL to loan repayment challenges faced by businesses and households as a result of the negative impact of the Covid pandemic on their operations and the economy at large –
Additionally, the provision of a 3-12 months moratorium on principal payments on loans granted to businesses and households by the bank per the directive issued by the Central Bank might also be a factor.
In terms of its Capital Adequacy Ratio (CAR), the bank is marginally above the 13 percent regulatory CAR requirement by the Bank of Ghana (BoG) with an adequacy ratio of 13.31 percent at the end of Q2 2021.
