…despite operational challenges in 2017
The La Community Bank (LCB) has increased its stated capital from GHS1.5 million in 2016 to GHS2.04 million last year, exceeding the regulatory requirement for rural banks.
The increase, the bank announced at its 2017 AGM, was achieved through the sale of shares to new and existing shareholders in 2017.
The bank’s total assets also grew by 15.4 percent from GHS44 million in 2016 to GHS50.8 million last year, mainly due to the success of deposit mobilization efforts. Deposits increased by 21.6 percent from GHS33.3 million in 2016 to GHS40.5 million last year, while loans and advances also increased marginally by about one percent from GHS3.04 million in 2016 to GHS3.07 million in 2017.
However, LCB’s operating performance last year, fell below that of 2016. The bank’s net profit before tax fell by about 68 percent from a restated figure of GHS2.06 million in 2016 to GHS659,698 in 2017 attributable to high operating expenses, which increased by 40 percent GHS1.97 million in 2016 to GHS2.76 million in 2017.
Personnel expenses of the bank also increased by 26.6 percent from GHS3.11 million in 2016 to GHS3.94 million in 2017.
The Managing Director of the bank, Mr. Peter Tehova, speaking on LCB’s legacy debts, said; “current loans as far back as 2015 are performing well, but the high nature of the bank’s old legacy debt up to about 2014 has distorted the ratio.”
“In the move to recover such debts which are still in our books, we have set up a new credit recovery team with the agenda to recover all these non-performing loans,” he said.
Going forward, Mr. Tehova explained that the bank will endeavour to identify credit worthy and viable businesses to support and increase lending to less risky consumer loan customers.
“Being risk conscious is to ensure that we tighten the loose ends and we believe our customers will cooperate with us. This also include the request for certain securities before loans are offered” he explained.
By Wisdom Jonny-Nuekpe