The write-up paraphrases sections from the Bible – adb edition<\/p>\n
From the book of exodus \u2018\u2019Still the people of ADB wandered in the darkness in June 2009. \u00a0Their new leader Steve Kpordzih had come to them as a prophet of hope and top performers. But now in May 2015 he is struggling to work out where ADB is on google map of performing banks.\u00a0 ADB found itself in a non-performing island yet Steve in his usual self-denial could not get it that he has lost the plot. He kept on attributing the bank\u2019s non-performance to Legacy issues when he has spent almost 6 years at the helm as MD ,ooh what a pity\u2019\u2019<\/p>\n
Pretax profits growth in 2014 had dipped to negative 40% from 2013 with a credit loss expense of GHS 59 million whiles its competitors and profit-range-colleagues in 2009 were riding high in the positive range of 142% for NIB, 28% for GCB, 65% for Ecobank, 55% growth for Calbank and 33% for BBG. And sadly ADB was ranked 21st in industry ranking for pre-tax variable. \u2018\u2019Oooh ADB! My little niece, how your Board and management have degraded you and undressed your financial strengths to leave you naked. Pity me ooh Lord and send your salvation\u2019\u2019.<\/p>\n
The bank share of industry loans had dipped from 5.79% in 2012 to 3.91% in 2014. How come a well-run bank had sunk into Capital adequacy ratio (CAR) crisis for 3 years and more not been able to book quality loans. For readers\u2019 education, Capital adequacy ratios are used to assess how risky a bank\u2019s balance sheet is and the degree to which the bank is vulnerable to an unexpected increase in bad loans.\u00a0 For over 3 years consecutively the bank has faced intermittent CAR limitations, which has prevented it from booking new loans and even enhancing the amounts it customers need. The bank of Ghana limit is 10% and as at year end 2014 ADB was 10.48% (13.2% in 2013). As at present (March and April 2015) the bank has breached the limit several times and is hovering around 9.5 to 9.8%. May the Mighty Arm of the omnipotent deliver ADB from financial rape and intimidating working environment.<\/p>\n
Another key performance indicator Cost to income ratio has been abysmal. Whiles their competitors are in the average range of 33-45%, ADB is hovering around a whooping 68% and this is sad. This clearly indicates lack of financial prudence. The bank pays 100,000.00 and 70,000.00 pounds for the MD to give speeches in UK when the bank had always faced liquidity challenges and borrow daily from the inter-bank market to survive even on salary paying days. OOO like Kalybos says what a WOOOWW; bad judgement at its peak. The bank within the last few weeks pays over Ghs 300,000.00 to Spectre Innovation for a day\u2019s press conference, stakeholder consultation and soli to journalists? I bet this can\u2019t happen in Ecobank and Fidelity which are serious performers with a strong supervisory Board.<\/p>\n
On Return on Assets and Return on Equity ADB ranks 20th and 19th respectively in the industry. Management always uses lack of government capitalization as a reason for poor performance but NIB faces the same challenges yet had ROE of 16.3 and Pretax profit of Ghs 79million whiles ADB is far steeping lower.<\/p>\n
A well run bank will always maintain adequate liquidity to meet liabilities and increase business portfolio. ADB loan to deposit ratio average for 4 years had always run around 85% to over 100% weekly which is lethal risk in banking. No wonder the bank is borrowing between 60m to 100m daily on the interbank market to survive. Prudent banking management indeed my dear. Loan to deposit ratio helps assess a bank\u2019s liquidity and by extension the solvency of the bank. Is that a good job done? OOH, Steve must examine his performance and apologize to the bank\u2019s staff and shareholders.<\/p>\n
The Business and Financial Times banking survey (18th May 2015) could not come at a better time to buttress the worker\u2019s point that the MD and Board must step aside. My understanding is that the staff are in absolute agreement to the IPO listing by the bank but deeply believe that with the present MD at the helm the inflows investment will be like pouring water into a sinkhole with no credible effects. The MD and Board are Financial Sinkholes that drain funds yet produce little in return. This is evidenced by hard facts over 5 years when ADB had questionably sold financial assets in Fidelity and Vanguard, Global Access and prime residential properties and yet Ooh Lord! do not see and feel how prudently the funds were applied.<\/p>\n
Oh Lord!! Let it not be ADB\u2019s funeral dirge, I plead that in your deep mercies grant the bank your salvation and mercy. Amen and Amen<\/p>\n
Let all concerned stakeholders join hands with the bank\u2019s staff in their quest to stop financial malfeasance and enhance the bank\u2019s financial and operational performance. Please do refer to the B&FT 18th May issue for your scrutiny and appraisal.<\/p>\n
ADB will not die from non-performance coma; but live to see the salvation of the Lord. The wicked with their ill-gotten wealth from ADB\u2019s financial rape will not have their peace but they and their questionable wealth will wither like grass and be found no more but ADB will live and come out stronger from its present mess.<\/p>\n
As the good book says \u2018\u2019these things my fellow citizens you may pursue; things that are ethical, of financial prudence, good corporate governance, transparency, probity and accountability and not the opposite\u2019\u2019. Please let the Board and management answer the following;<\/p>\n
Who are the shareholders of Agriderv Limited (Accra Financial Centre) and the promoters behind the questionable companies that own Agriderv<\/p>\n
Did the former Board as asserted by the former chairman approve the Financial arrangement for Accra Financial Centre as BOT (Build, operate and transfer)? What has changed since April 2013?<\/p>\n
Did ADB guarantee a Loan for Agriderv to continue the AFC building?<\/p>\n
Did ADB borrow money from Citibank and utilize a significant portion as advance payment to Agriderv to commence the Accra Financial Centre (AFC) project?<\/p>\n
Who purchased the Roman Ridge residence of past ADB MD\u2019s?<\/p>\n
Is the bank still paying rent to a Business whose loans was written-off in 2014?<\/p>\n
A gentle answer turns away wrath, sit down strikes and demonstrations, but harsh words\/reactions and lack of transparency stirs up anger and red bands.<\/p>\n
<\/p>\n
Author:<\/strong> Komla Klutse<\/p>\n Banking and Financial Analyst<\/p>\n Author\u2019s email:<\/strong> komlaklutse@yahoo.com<\/p>\n","protected":false},"excerpt":{"rendered":" The write-up paraphrases sections from the Bible – adb edition From the book of exodus \u2018\u2019Still the people of ADB wandered in the darkness in June 2009. \u00a0Their new leader Steve Kpordzih had come to them as a prophet of hope and top performers. But now in May 2015 he is struggling to work out […]<\/p>\n","protected":false},"author":5,"featured_media":113982,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[8],"yoast_head":"\n