Agricultural Development Bank records GHS 52.8m net profit at end-Q2 2023
Agricultural Development Bank showcased strong performance in Q2 2023 with a noteworthy net profit of GHS 52.8 million, exhibiting a commendable 32% increase from the previous year’s figure of GHS 40 million.
The bank’s impressive profit growth can be attributed to a substantial rise in net interest income, which soared from GHS 222 million to GHS 275 million year-on-year. This robust expansion in net interest income underscores the bank’s effective management of its interest-earning assets and liabilities.
During the review period, Agricultural Development Bank witnessed a remarkable expansion in its total assets, reaching GHS 8.6 billion, compared to GHS 6.5 billion previously.
This surge was primarily driven by a notable increase in the bank’s loans and advances to customers, amounting to GHS 3.9 billion, coupled with substantial growth in cash and cash equivalents, reaching GHS 2.3 billion.
Liabilities of the bank experienced significant growth, propelled mainly by customer deposits, which rose from GHS 5.5 billion to GHS 7.9 billion year-on-year. The bank’s ability to attract higher customer deposits demonstrates its continued appeal to depositors and market confidence.
A cause for concern arises as Agricultural Development Bank’s Capital Adequacy Ratio (CAR) tumbled to 3.36% at the end of Q2 2023, down from 11.17% in the same period the previous year. This worrisome decline positions the bank’s CAR significantly below the industry’s average CAR of 14% and the Bank of Ghana’s mandatory requirement of 13%.
The bank’s loan asset quality also showed signs of deterioration, with non-performing loans surging from 27.2% to 30.1% year-on-year. This uptick in non-performing loans raises concerns over the bank’s ability to manage credit risks effectively and underscores the need for diligent loan portfolio management.
As Agricultural Development Bank navigates these challenging dynamics, prudent measures and strategic planning are imperative to safeguard the bank’s financial health and sustain its growth trajectory in the face of prevailing market uncertainties.
