Agricultural Development Bank reduce NPLs to 32%; grows assets to GHS 6.4bn
State-owned Agricultural Development Bank (ADB) for the 2021 fiscal year recorded gross Non-Performing Loans (NPLs) of 32 percentage points.
ADB’s current NPLs represents twice the industry’s average NPLs of 15.2%.
Per the bank’s Unaudited Financial Statement for 2021, the recorded NPLs marks a reduction from the previous year’s NPLs of 34%, indicating an improvement in the bank’s loan asset quality.
Capital Adequacy Ratio (CAR) which measures the bank’s ability to absorb bad loans made, marginally declined from 14.87% in 2020 to 13.33% in 2021
Despite the decline, the bank’s CAR is well above the Bank of Ghana’s regulatory requirement of 11.5% CAR.
In the review period, the bank witnessed significant growth in its assets value.
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Total assets value posted at end-2021 amounted to GHS 6.46bn, an increase of some GHS 745m from the 2020 value of GHS 5.71bn.
Factors accounting for the increment in the bank’s assets value were cash and bank balances which increased from GHS 755m to GHS 924m; investment securities which grew from a value of GHS 2.22bn to GHS 2.40bn; and loan and advances to customers which also increased from GHS 1.91bn to GHS 2.31bn in 2020 and 2021 respectively.
Liabilities of ADB fueled primarily by deposits from customers amounted to GHS 5.49bn in 2021 from the previously recorded value of GHS 4.86bn liabilities recorded in 2020.
Of the total liabilities, deposits from customers accounted for GHS 4.92bn, representing 89.7% of the bank’s total liabilities.
The bank’s profit after tax under the review period amounted to GHS 116m, an increase of GHS 51.5m from the previous year’s profit after tax value of GHS 65.4m.
Examine ADB’s Unaudited Financial Statement for 2021
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