Exceptional Growth and Strategic Moves at Fiaseman Rural Bank PLC
Fiaseman Rural Bank PLC, located in Bogoso within the Prestea Huni-Valley district of the Western Region, has demonstrated remarkable financial performance in 2024. The bank’s achievements have been highlighted across various financial indicators, showcasing a significant upward trend in profitability and operational efficiency.
Profitability and Dividend Performance
The bank reported an impressive pre-tax profit of approximately GH¢69.6 million for the year 2024, compared to about GH¢37 million in 2023. This represents a growth of 88.19%, which is the second-highest recorded in the rural banking sector. This growth was driven by the effective leadership and strategic decisions made by the board, management, and staff, aimed at maximizing returns for all stakeholders.
In response to this growth, the Board proposed a dividend per share of GH¢0.14p, amounting to GH¢13,873,017.06 for the year under review. This is a substantial increase from the previous year’s dividend of GH¢0.13 per share, totaling GH¢7,369,779. The return on investment for shareholders reached 70%, which is the highest in the industry so far.
Key Financial Indicators
Several other financial metrics also showed notable improvements:
- Total Deposits: Increased to GH¢830.7 million, up from GH¢465.2 million in 2023, representing a 78.63% growth.
- Total Assets: Rose to GH¢961.1 million, compared to GH¢537 million in 2023, showing a 79.1% increase.
- Total Loans and Advances: Grew by 28.1%, from GH¢230 million to GH¢295 million.
- Stated Capital: Increased from GH¢8,193,571 in 2023 to GH¢17,369,710 in 2024, a rise of 111.99%, well above the regulatory requirement of GH¢1 million.
- Investments: The bank’s investments in Treasury Bills and other instruments increased significantly, from GH¢208.6 million in 2023 to GH¢502 million, marking a 140.60% growth.
Bonus Shares and Share Valuation
At the 35th Annual General Meeting (AGM) in 2023, the bank decided to issue bonus shares. A consultant was engaged to develop a model that would benefit all shareholders, particularly those who invested when the bank was established in 1983.
Additionally, the consultant was tasked with valuing the bank’s share price to determine a competitive price per share. After careful consideration, the board proposed a price of GH¢1.00 per share, reflecting the sacrifices made by early investors. This decision aims to provide a fair value for existing shareholders, allowing them to sell their shares at GH¢1.00 instead of the previous GH¢0.20p.
Operational Environment and Challenges
Despite the positive financial results, the fiscal environment in 2024 presented challenges. Primary and overall fiscal deficits exceeded targets at 3.7% and 7.7% of GDP, respectively, due to accumulating arrears and unplanned spending. However, public debt to GDP declined to 70.5% thanks to a haircut on Eurobonds and strong GDP growth.
The banking sector remained stable, with assets growing by 33.8%. However, the non-performing loan ratio rose to 21.8% by the end of the year. Continued profit growth, recapitalization, and strict credit standards are essential for full recovery.
Corporate Social Responsibility
Fiaseman Rural Bank PLC also emphasized its commitment to corporate social responsibility (CSR). In 2024, the bank allocated over GH¢211,648.50 to support various social causes, including health, education, sports, and agriculture.
Future Outlook and Innovations
Looking ahead, the bank plans to expand its market presence and open new branches in the coming years. The CEO, Nana Dr Godfred Frank Opoku, highlighted the importance of leveraging technology to enhance customer experience and ensure security in the digital space.
To facilitate this, the bank introduced a short code *992# for convenient fund transfers, bill payments, and account registration. Additionally, the bank has implemented agency banking within its catchment area, offering innovative solutions to meet customers’ financial needs.
Through these strategic initiatives, Fiaseman Rural Bank PLC continues to position itself as a leader in the rural banking sector, committed to sustainable growth and shareholder value.