Thursday, May 12, 2011
Yet, Another Good Year For Trust Bank
NEWS BANJUL THE GAMBIA (MB)- The Managing Director of Trust Bank Limited, Pa Macoumba Njie, has noted that Trust Bank Ltd. has not only succeeded in retaining its overall market share in the industry, but the bank also exceeded targets set for year in almost all of its key performance indicators.
Njie made these remarks in early May 2011, at the Kairaba Beach Hotel, while reviewing the Trust Bank Annual report and Financial Statements for the year ended 31 December 2010.
The AGM was meant to review the bank’s performances and also retaining its overall market share in the industry. According to him, the total assets increased by 16% from D2.9 Billion to D3.4 Billion with investment, and loans alone growing by 20% and 23% respectively.
He added that deposits grew by 17% from D2.4 Billion to D2.9 Billion driven by an enlargement of the Bank’s Client base.
He disclosed that profitability only increased marginally by 7.8% from D64 million to D69million. He noted that the year 2010 unfolded with cautious optimism about prospects of economic recovery both locally and globally. He told the meeting that the timely diagnosis of the global financial crisis, combined with the efficient adoption of measures to shield economies across the world, contributed to a largely successful rebound from the crisis.
The Trust Bank MD also said that while the recovery process is still ongoing and gradual, in the short term at least, it has afforded most countries an opportunity to adopt pre-emptive measures to mitigate on their economies. According to the MD, in The Gambia the outlook for continued economic growth remains positive, noting that the economy has benefited from a rebound in tourism, remittances, construction and agriculture and with the Government’s pursuit of sound economic management, and low inflation policies.
Njie told his audience that it is hopeful that these positive developments would impact favourably on consumer, investor and business confidence thereby propelling growth. He further said that competition in the Banking Industry has continued to grow, and this choice for customers has changed banking in The Gambia as they knew it just a few years ago. He noted that on the downside, deposits are becoming more expensive, loan qualities are declining, provisions for loan losses are increasing and marketing, personnel and capital costs are increasing.
According to him, also industry profits as a whole has been on the decline, and on the plus side, banks have become more innovative with various strategies in place for providing easy, safe and accessible banking to meet customers’ expectations.
The TBL MD said either way they look at it however, the banking business has undergone significant and challenging transformation.
“Let me hasten to add that we are aware that much is still expected of us,” he said, as he lamented that the quality of the bank’s loan book leaves it more vulnerable to stress than they would like, and this needs to be turned around, so that the bank regains its glory as the engine of growth and profits it has been known for all these years.
He stressed that they are not content with the profits made in the last two years, as they know that the bank has the potential to generate higher levels of profitability.
Reading a Statement on behalf of the Board of Directors, the Chairman of the Board, Mr. Ken Ofori-Atta noted that the Gambia like most low income countries, held up well during the crisis although sharp drops in tourism and remittances were recorded.
According to him, during the period of the crisis, growth remained steady at about 5 percent compared to the average of 6 percent recorded in the preceding periods. He added that inflation also remained in single digits, and according to analysis, a rebound in agriculture greatly helped to cushion the impact of the sharp drops in tourism, and remittances and also helped to outpace growth in many other countries in the sub-region.
He declared that Trust Bank has remained profitable and financially strong. He further declared that one of the greatest strengths of the aptly named “Trust bank” has been the “trust” and “confidence” that it enjoys from its Stakeholders, who have remained firmly positive and supportive of the Bank’s business and hence its ability to continue to deliver such relatively strong results.
The bank’s after tax increased by 8% from D64.9 million to D69.8 million, Dividends per share increased by 11% from 90 bututs to 100 bututs, shareholders funds increased by 4% from D281 million to D290 million.
Loans and Advances grew by 23% from D1.1Billion; deposits grew by 17% from D2.4Billion to D2.9Billion and total assets increased by 16% from 2.9 Billion to D3.4 Billion.
According to the official, the arrival of Zenith Bank in the first quarter of 2010, brought the number of banks to 14, doubling the number of banks operating in the country in just three years. He said that according to the IMF Mid 2010 report while the increased number of banks helped to fuel a deepening of financial intermediation, it also heralded intense competition among the 14 banks in such a small market of 1.7 million people.
He noted that as a result of the competition for instance, there has been increased leading in both the public and private sectors which unfortunately led to increased risk and Non-Performing Loans (NPLs) top the banking system.