AfDB implements robust liquidity framework as it is optimistic about recording steady growth
The Agricultural Development Bank says it has put in place a robust liquidity management framework and an emergency financing plan that provides adequate buffers to support the flow of liquidity in a stress scenario.
The financial intermediary’s liquidity ratio as of December 31, 2020 was 117.76% and the bank expects it to remain above the internal limit of 40% and the regulatory limit during the crisis period.
In addition, the Bank’s open positions in foreign currencies are expected to remain within tolerable limits in accordance with its risk appetite.
Chairman of the board, Alex Bernasko, speaking to the bank’s shareholders at its Annual General Meeting (AGM), said all relevant indices in 2020, showing a positive outlook and also allowing the bank to climb three places from 20th to 17th position in the ranking of banks in 2020.
The Board reviewed and adopted a revised three-year strategic plan (2021-2023) for the Bank. The exercise enabled management and the board of directors to rethink the bank’s raison d’Ãªtre and to redefine its mission and vision statements, its strategic objectives and its core values ââto bring them more in line with the bank’s reason for being. to be from the bank.
Mr. Bernasko said that the revised strategic plan, which spans the period 2021 to 2023, provides, among other things, guidance to influence the current operating model of the bank and the changes that will ensure its sustainability and growth, adding KPIs and measures for their measurement have been transformed into effective dashboards for monitoring and evaluation.
The AfDB recorded a profit of 65.4 million euros in 2020
The AfDB recorded a profit of 65.4 million euros compared to 14.9 million euros in 2019. This represents a growth of over 400% in performance in 2020, resulting in a return on equity and a return on assets of 7.69% and 1.14% against 1.87% and 0.32% respectively. in 2019.
The size of the balance sheet has grown significantly over the year, going from 4.6 billion euros in 2019 to 5.7 billion euros in 2020 (24%), supported in part by the improvement in the holding of securities investment in line with its strategic objectives.
The bank’s non-performing loan portfolio saw a significant reduction from 41% in 2019 to 34% in 2020.
Its goal is to bring the NPL ratio back within industry ranges by 2023. The industry average NPL ratio is 17.5%
Deposits increased by 26%, from 3.4 billion euros in 2019 to 4.2 billion euros in 2020.
At the end of 2020, the capital adequacy ratio and the directive on capital requirements inspired by the Basel Committee were respectively 16.5% and 14.5%, both above the regulatory minimum.
No dividend payment
Despite recording a substantial profit in 2020, the directors of the bank did not recommend the payment of a dividend.
They consider, however, that the state of the bank’s affairs is satisfactory.
The bank now has Financial Investment Trust as the majority shareholder with 64.05%, while the Government of Ghana and Ghana Amalgamated Trust PLC holds 21.50% and 11.26% as 2sd and 3rd majority shareholders.
Together, they control about 96.81% of the bank.