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uniBank (Ghana) Limited

Report and financial statements 25

UNIBANK GHANA LIMITED 2016 ANNUAL REPORT


Corporate information

1

Content Page

Directors, Officials & Registered Office 2

Vision, Mission & Values 3

Directors‟s Report 4 - 6

Statement of Directors‟ Responsibilities 7

Independent Auditor‟s Report 8 - 10

Statement of Profit or Loss and other Comprehensive Income 11

Statement of Financial Position 12

Statement of Changes in Equity 13

Statement of Cash Flows 14

General Information and Summary of Significant Accounting Policies 15 - 68


Corporate information

2

Directors: Opoku-Gyamfi Boateng - Chairman

Felix Nyarko-Pong - Chief Executive Officer

Kwabena Duffuor II(Dr.) - Chief Operating Officer

Owusu-Ansah Awere - Executive Director

Ekow Nyarko Dadzie-Dennis - Executive Director

Alexander Gaddiel Buabeng - Non-Executive Director

Kofi Kyereh-Darkwah - Non-Executive Director

Nana Boakye Asafu-Adjaye - Non-Executive Director

Newman Kwadwo Kusi(Prof.) - Non-Executive Director

Ben Korley - Non-Executive Director (Resigned 20 January 2016)

Kakra Duffuor-Nyarko(Mrs.) - Non-Executive Director

Company Secretary Sylvia Assimeng-Archer(Mrs.)

Executive Management Felix Nyarko-Pong - Chief Executive Officer

Kwabena Duffuor II(Dr.) - Chief Operating Officer

Owusu-Ansah Awere - Executive Director - Operations and IT

Ekow Nyarko Dadzie-Dennis - Executive Director - Finance, Retail and Strategy

Kwesi Nkrumah Pimpah - Director - Risk Management and Compliance

Clifford Duke Mettle - Director - E-banking, Products and Marketing

Sylvia Assimeng-Archer(Mrs.) - Company Secretary

John Collins Arthur - Executive Head, Treasury and Global Trade

Elsie Dansoa Kyere(Mrs.) - Executive Head, Corporate Banking

Florence Adei Ohene(Mrs.) - Executive Head, Innovations and Business Execution

Solicitors: Prime Attorneys

11 Volta Street, Airport

Residential Area

PMB CT 179, Cantonments

Accra

Auditors: Deloitte & Touche

Chartered Accountants

4 Liberation Road

P.O.Box GP 453

Accra

Registered Office: World Trade Centre (WTC) No. 29, 13th Floor

Independence Avenue, Accra

P.O.Box AN 15367, Accra-North

Bankers: Bank of Ghana, One Thorpe Road, P.O.Box GP 2674, Accra, Ghana

Citi Bank, N.A. 111 Wall Street, 10043 New York

BHF Bank Bockenheimer LandStrasse 10. 60323 Frankfurt AM MAIN Germany

Ghana International Bank Plc, 67 Cheapside,1st Floor, Regina House, London EC2V 6AZ

Standard Chartered Bank, London. Clement House 27, Clements Lane, London EC4N 7P


Vision, Mission & Values

3

VISION, MISSION & VALUES

Vision

“To be the leading and preferred Bank offering comprehensive financial solutions to our chosen customers

(SME and Personal Banking Markets) in a professional, caring, responsive and profitable way”.

Mission

The Bank‟s mission is to:

Provide the best value for our customers;

Create an excellent working environment for our employee development and growth;

Enhance shareholder value;

Be socially responsive to our communities.

Core Values

Flexible

Minimum bureaucracy

Adaptive to changing needs

Caring

Customer delight

Personalized service

Vibrant

Energetic

Ingenious

Team

Will to win

Oneness of purpose

Strength


Directors’ report For the year ended 31st December 2016

4

Directors’ report

In accordance with the requirements of Section 132 of the Companies Code, 1963 (Act 179) as amended

and the Banking Act of 2016 (Act 930), we the Board of uniBank (Ghana) Limited submit our Annual Report

on the state of affairs of the Bank for the year ended 31st December 2016. The Directors in submitting to the

Shareholders, the financial statements of the Bank for the year ended 31st December 2016 report as follows:

1. Financial Results

2016

2015

GHS

GHS

Net profit before tax

59,688,694

51,326,509

Tax

(17,713,524)

(12,342,631)

-

Leaving net profit after tax of

41,975,170

38,983,878

To which is added Income Surplus at 1 January

36,571,136

20,053,023

Prior Year Tax Adjustment (under Provision)

-

(1,054,927)

Transfer to Statutory Reserve

(20,987,585)

(19,491,939)

Transfer to Regulatory Credit Reserve

(5,586,741)

(1,918,900)

Leaving Income Surplus at 31 December

51,971,980

36,571,135

2. Dividend No dividend was proposed during the year.



5

3. Directors

The Directors who held office during the year were as follows:

Name Designation

Opoku-Gyamfi Boateng - Chairman

Felix Nyarko-Pong - Chief Executive Officer

Kwabena Duffuor II (Dr.) - Executive Director

Owusu-Ansah Awere - Executive Director

Ekow Nyarko Dadzie-Dennis - Executive Director

Alexander Gaddiel Buabeng - Non-Executive Director

Kofi Kyereh-Darkwah - Non-Executive Director

Nana Boakye Asafu-Adjaye - Non-Executive Director

Newman Kwadwo Kusi (Prof.) - Non-Executive Director

Ben Korley - Non- Executive Director (Resigned 20 January 2016)

Kakra Duffuor-Nyarko (Mrs.) - Non-Executive Director

4. Principal Activities

The principal activity of the Bank during the year was in accordance with its regulations and there was no

change in the principal activities during the year.

5. Auditors

The Bank‟s Auditors, Deloitte and Touche, having qualified under Section 134(5) of the Companies Code

1963 (Act 179) as amended have proposed to continue in office.

6. Other Matters

The Directors confirm that no matters have arisen since 31st December 2016 which, materially affect the

financial statements of the Bank for the year ended on that date.

7. Strategic Focus and Outlook for 2017

There is a drive across the industry towards digitalization of processes and the increasing use of various

electronic channels to serve customers. uniBank has made so much strides in this area, having invested

heavily in the systems and e-tools that would enable the Bank stay ahead of this drive and remain

competitive. In 2017, we shall be active in this space and drive more efficiency through our installed

applications and electronic systems.

Our major objective over the past few years has been to achieve a good balance between profitability and a

strong balance sheet. This objective will continue to drive our plans and strategies in 2017 and into the



6

medium-term, fueled by high liquidity. Consequently, for 2017, we have adopted various plans and

developed the appropriate strategies aimed at ensuring that this is speedily achieved.

Given the rapid disruption spawned by fin-tech companies in the financial sector, we shall position the Bank

to reap the full benefits thereof. In line with this goal, the bank will pursue a deliberate digitalization strategy

that will significantly transform our operations in the areas of Retail, SME, Corporate, IT, Marketing, and E-

Banking. Self-Service (digital) branches will be deployed in East Legon, Legon Campus, Airport City, Capital

Place (Airport), KNUST campus, Golden Tulip, among others. Digitalization will provide convenience, speed,

and enhanced customer experience.

Through our aggressive deposit mobilization drive, anchored by initiatives which include widening of our

school fees and hospital charges collections mandates, internal and external deposit promotions, tapping

into float generated by Telcos from mobile money, among others, we expect to generate enough deposits to

invest in carefully selected assets to make the most gains without exposing the Bank to unnecessary

avoidable risks.

On loans and advances, we shall be selective in lending, with more preference for liquid, short-term facilities,

especially to SMEs. Corporate lending will be skewed towards commerce, export businesses and donor-

funded projects while scaling down lending to real estate companies and oil & gas businesses. Through

continuous monitoring, we shall ensure the loan book growth does not outstrip deposits growth at any point

in time.

Overall, we expect our balance sheet to be more liquid and structurally efficient. All new deposits will be

channeled into investments to improve our investment portfolio and income generation.

For and Behalf of the Board of Directors

Chairman Chief Executive Officer

Dated: 9th

March, 2017


Statement of Directors’ Responsibilities

7

The Directors‟ are responsible for preparing financial statements for each financial year which give a true

and fair view of the state of affairs of the Bank at the end of the financial year and the statement of profit or

loss and other comprehensive income of the Bank for that year. In preparing those financial statements, the

Directors‟ are required to:

Select suitable accounting policies and then apply them consistently;

Make judgements and estimates that are reasonable and prudent;

State whether the applicable accounting standards have been followed;

Prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the Bank will continue in business.

The Directors‟ are responsible for ensuring that the Bank keeps accounting records which disclose with

reasonable accuracy the financial position of the Bank and which enables them to ensure that the financial

statements comply with Companies Code 1963 (Act 179) as amended and the Banking Act, 2004 (Act 673)

as amended by Banking (Amendment) Act 2007 (Act 738) and International Financial Reporting Standards.

They are responsible for safeguarding the assets of the Bank and hence for taking steps for the prevention

and detection of fraud and other irregularity.

8

Independent Auditor’s Report To The Members of uniBank (Ghana) Limited Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of uniBank (Ghana) Limited which comprise the

statement of financial position as at 31 December 2016, the statement of profit or loss and other

comprehensive income, statement of changes in equity, statement of cash flows for the year then ended, the

notes to the financial statements including a summary of significant accounting policies and other national

disclosures.

In our opinion, the financial statements give a true and fair view of the financial position of uniBank (Ghana) Limited as at 31 December 2016 and the financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards, and in the manner required by the Banking Act 2004 (Act 673), Section 78 (2), the Banking (Amendment) Act 2007 (Act 738) and the Companies Act, 1963 (Act 179). Basis of opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with the requirements of the International Federation of Accountants Code of Ethics for Professional Accountants (IFAC Code) as adopted by the Institute of Chartered Accountants Ghana (ICAG) and we have fulfilled our other ethical responsibilities in accordance with IFAC Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information The directors are responsible for the other information. The other information comprises the Report of the Directors, which we obtained prior to the date of this auditor‟s report. The other information does not include the financial statements and our auditor‟s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or

our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Based on the work we have performed on the other information that we obtained prior to the date of this

auditor‟s report, if we conclude that there is a material misstatement of this other information, we are required

to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards and the requirements of the Companies Act, 1963, (Act 179) and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

9

Independent Auditor’s Report (cont’d) To The Members of uniBank (Ghana) Limited Report on the Audit of the Financial Statements In preparing the financial statements, the directors are responsible for assessing the Bank‟s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern and using the going concern

basis of accounting unless the directors either intend to liquidate the Bank or to cease operations, or have no

realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor‟s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional

scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to

fraud or error, design and perform audit procedures responsive to those risks, and obtain audit

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting

a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal

control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Bank‟s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the directors.

We communicate with the audit committee and the directors regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant deficiencies in internal

control that we identify during our audit.

Report on Other Legal and Regulatory Requirements The Companies Act, 1963 (Act 179) requires that in carrying out our audit work we consider and report on the following matters. We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit. We confirm that: i) We have obtained all the information and explanation which to the best of our knowledge and believe

were necessary for the purpose of our audit.

ii) The Bank has kept proper books of account, so far as appears from our examination of those books.

iii) The Bank‟s financial position and its statement of profit or loss and other comprehensive income are

in agreement with the books of account and returns.

10

Independent Auditor’s Report (cont’d) To The Members of uniBank (Ghana) Limited Report on the Audit of the Financial Statements The Banking Act 2004 (Act 673) section 78 (2) and the Banking (Amendment) Act 2007 (Act 738) requires that we state certain matters in our report. We hereby state that:

I. the accounts give a true and fair view of the state of affairs of the Bank and their results for the year under review;

II. we were able to obtain all the information and explanations required for the efficient performance of

our duties as auditors;

III. the Bank transactions were within its powers; and

IV. the Bank has generally complied with the provisions in the Banking Act 2004 (Act 673) and the Banking (Amendment) Act 2007 (Act 738).

The engagement partner on the audit resulting in this independent auditor's report is Kwame Ampim-Darko (ICAG/P/1453).

For and on behalf of Deloitte & Touche (ICAG/F/2017/129)

Chartered Accountants

4 Liberation Road

Accra Ghana

28

th March, 2017


Statement of profit or loss and other comprehensive income For the year ended 31st December 2016

11

2016 2015

Note GHS GHS

Interest income 2 1,347,883,423

632,800,000

Interest expense 3 (1,044,754,294) (495,947,885)

Net interest income

303,129,129

136,852,115

Fee and commission income 4 40,284,666

44,242,498

Trading Income 5a 49,391,371

55,217,502

Other Income 5b

120,313

22,658,343

Operating income

392,925,479

258,970,458

Impairment Loss on Loans & Advances 8 (80,247,571) (20,682,177)

Personnel Expenses 7 (63,037,357) (46,200,328)

Depreciation and Amortization 14a (16,238,648) (10,371,964)

Other Expenses 6 (173,713,209) (130,389,480)

Profit before taxation

59,688,694

51,326,509

National fiscal stabilization levy 9c (2,984,435) (2,566,326)

Income tax expense 9d (14,729,090) (9,776,305)

Profit for the year

41,975,170

38,983,878

Other comprehensive income

- -

Total comprehensive income for the year

41,975,170

38,983,878

The notes on pages 15 to 68 are an integral part of these financial statements.


Statement of financial position As at 31st December 2016

12

2016 2015

Note GHS GHS

ASSETS

Cash and cash equivalents 10 1,503,415,970 661,408,248 Non-Pledged Trading assets 11 438,078,747 343,878,221

Pledged Trading assets 11 511,600,274 42,945,935

Loans and advances to customers 12 2,885,538,777 2,475,190,684

Other assets 13 229,313,512 151,497,508

Property, plant and equipment 14a&b 175,243,260 156,011,870

Total assets

5,743,190,540 3,830,932,466

Liabilities

Deposits from customers 15 2,615,879,033 2,728,142,189

Borrowings 16 2,394,179,397 660,519,775

Other liabilities 17 246,484,824 136,532,246

Current tax liability 9a 1,170,356 54,392

Deferred tax liability 9b 7,389,328 4,735,154

National fiscal stabilization levy 9c 331,047 167,325

Total Liabilities

5,265,433,985 3,530,151,081

Stated capital 18 295,129,890 160,129,890

Revaluation Reserve 19a 22,620,092 22,620,091

Statutory reserve funds 19b 88,594,627 67,607,042

Regulatory credit risk reserve 20 19,439,968 13,853,226

Income surplus 21 51,971,979 36,571,136

Total equity

477,756,555 300,781,385

Total equity and liabilities 5,743,190,540 3,830,932,466

DIRECTOR DIRECTOR The notes on pages 15 to 68 are an integral part of these financial statements.

UniBank (Ghana) Limited

Statement of changes in equity For the year ended 31st December 2016

13

Regulatory

Share Revaluation Statutory Credit Risk Income

Capital Reserve Reserves Reserve Surplus Total

GHS GHS GHS GHS GHS GHS

Balance at 1st January 2016

160,129,890

22,620,091

67,607,042

13,853,226

36,571,136

300,781,385

Issue of shares 135,000,000 - - - - 135,000,000 Prior year tax adjustment (under provision) - - - - - - Total comprehensive income - - - - 41,975,170 41,975,170 Transfer to/(from) - - - 5,586,741 (5,586,741) - Transfer to/(from) - - 20,987,585 - (20,987,585) -

Balance at 31st December 2016 295,129,890 22,620,091 88,594,627 19,439,967 51,971,980 477,756,555

Balance at 1st January 2015 120,129,890 22,620,091 48,115,103 11,934,326 20,053,023 222,852,433 Issue of Shares 40,000,000 - - - - 40,000,000 Prior year tax adjustment (under provision) - - - - (1,054,927) (1,054,927) Total comprehensive income - - - - 38,983,878 38,983,878 Transfer to/(from) - - 19,491,939 - (19,491,939) - Transfer to/(from) - - - 1,918,900 (1,918,900) -

Balance at 31st December 2015 160,129,890 22,620,091 67,607,042 13,853,226 36,571,135 300,781,384 The notes on pages 15 to 68 are an integral part of these financial statements.


Statement of cash flows For the year ended 31st December 2016

14

2016 2015

Notes

GHS GHS Cash flows from operating activities

Net profit before tax

59,688,694 51,326,509

Adjustments for:

Depreciation

15a

16,238,648 10,371,964 Impairment on financial asset

8

80,247,571 20,682,177

Operating profit before working capital changes

156,174,913 82,380,650 Change in trading assets

11

2,424,777 (49,990,015)

Change in loans & advances

(490,595,666) (1,187,322,995) Change in other asset accounts

(77,816,004) (104,382,921)

Change in deposits from customers

(112,263,156) 1,077,346,317 Change in borrowings

203,628,322 123,434,360

Change in interest payable & other liabilities

109,952,578 59,990,345 Cash generated from operations

(208,494,236) 1,455,741

National fiscal stabilization levy

9c

(2,820,713) (2,854,836)

Corporate tax paid

9a

(10,958,951)

(8,816,389)

Net cash used in operating activities

(222,273,900)

(10,215,484)

Cash inflows from investing activities

Profit on disposal of property, plant and equipment 15b

(495) - Purchase of property plant & equipment

(35,671,536) (36,970,362)

Proceeds from sale of property & equipment

201,993 32,080,676

Net cash from investing activities

(35,470,038)

(4,889,686)

Cash inflows from financing activities

Proceeds from issuance of shares

135,000,000 40,000,000 Net Cash from financing activities

135,000,000 40,000,000

Net Increase/(Decrease) in cash and cash equivalent

(122,743,938)

24,894,830 Cash and cash equivalents at 1st January

440,652,145 415,757,315

Cash and cash equivalents at end of year 22

317,908,207 440,652,145

Interest paid

1,222,125,900 458,704,773

Interest received

933,174,535 539,103,272


Notes to the financial statements For the year ended 31st December 2016

15

1. Reporting entity uniBank (Ghana) Limited, a private company limited by shares, was incorporated and domiciled in Ghana under the Companies Code, 1963 (Act 179) and the Banking Act, 2016 (Act 930). The Bank is permitted by its Regulations to carry on, the business of banking. The address of the registered office of the Bank is World Trade Centre (WTC), No. 29, 13

th Floor, Independence Avenue, Accra. P O Box AN 15367, Accra-North.

The financial statements of the Bank for the year ended 31st December 2016 were approved by the Board of

Directors on 9th March, 2017.

2. Basis of preparation

a. Statement of compliance

The financial statements have been prepared in accordance with the International Financial Reporting

Standards, as issued by the International Accounting Standards Board (IASB) and the Companies Code 1963

(Act 179).

b. Basis of preparation

The financial statements have been prepared on a historical cost basis except for financial instrument

measured at fair value and property, plant and equipment that are stated at their fair value. The financial

statements are presented in cedis and all values are rounded to the nearest thousands, except when

otherwise indicated.

c. Functional and presentation currency

The financial statements are presented in Ghana Cedis (GH₵), which is the functional currency

d. Use of estimates and judgment

The preparation of financial statements in conformity with IFRSs requires management to make judgement,

estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,

income and expenses. The estimates and the associated assumptions are based on historical experience and

other factors that are reasonable under the circumstances, the results of which form the basis of making the

judgement about the carrying amounts of assets and liabilities that are not readily apparent from other

sources. Actual results may differ from these estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revision to accounting

estimates are recognized in the period in which the estimate is revised if the revision affects only that period,

or in the period of the revision and future periods if the revision affects both current and future periods.



16

3. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in this financial statement.

a. Going concern

The Bank‟s management has made an assessment of its ability to continue as a going concern and is

satisfied that it has the resources to continue in business for the foreseeable future. Furthermore,

management is not aware of any material uncertainties that may cast significant doubt upon the Bank‟s ability

to continue as a going concern. Therefore, the financial statements continue to be prepared on the going

concern basis.

b. Fair value of financial instrument

Where the fair values of financial assets and financial liabilities recorded on the statement of

financial position cannot be derived from active markets, they are determined using a variety of

valuation techniques that include the use of mathematical models. The inputs to these models are derived

from observable market data where possible, but if this is not available, judgement is required to establish

fair values.

c. Impairment losses on loans and advances

The Bank reviews individually, significant loans and advances at each statement-of-financial-position date to

assess whether an impairment loss should be recorded in the income statement. In particular, management‟s

judgement is required in the estimation of the amount and timing of future cash flows when determining the

impairment loss. These estimates are based on assumptions about a number of factors and actual results

may differ, resulting in future changes to the allowance. Loans and advances that have been assessed

individually (and found not to be impaired) are assessed together with all individually insignificant loans and

advances in groups of assets with similar risk characteristics. This is to determine whether provision should

be made due to incurred loss events for which there is objective evidence, but the effects of which are not yet

evident. The impairment loss on loans and advances is disclosed in more detail in Note 13.

d. Deferred tax assets

Deferred tax assets are recognized in respect of tax losses to the extent that it is probable that future taxable

profit will be available against which the losses can be utilized. Judgement is required to determine the

amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable

profits, together with future tax-planning strategies.



17

The significant accounting policies adopted by uniBank (Ghana) Limited under the International Financial

Reporting Standards (IFRSs) are set out below:

e. Interest income and expense

For all financial instruments measured at amortized cost, interest income or expense is recorded using the

Effective interest rate (EIR). EIR is the rate that exactly discounts estimated future cash payments or receipts

through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying

amount of the financial asset or financial liability. The calculation takes into account all contractual terms of

the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are

directly attributable to the instrument and are an integral part of the EIR, but not future credit losses.

The carrying amount of the financial asset or financial liability is adjusted if the Bank revises its estimates of

payments or receipts. The adjusted carrying amount is calculated based on the original EIR and the change in

carrying amount is recorded as ‟Interest and similar income‟ for financial assets and Interest and similar

expense for financial liabilities.

f. Commissions and fees

The Bank earns fee and commission income from a diverse range of services it provides to its customers. Fee

income can be divided into the following two categories:

(i) Fee income earned from services that are provided over a certain period of time

Fees earned for the provision of services over a period of time are accrued over that period. These fees

include commission income and asset management, custody and other management and advisory fees.

Loan commitment fees for loans that are likely to be drawn down and other credit related fees are deferred

(together with any incremental costs) and recognized as an adjustment to the EIR on the loan. When it is

unlikely that a loan will be drawn down, the loan commitment fees are recognized over the commitment period

on a straight-line basis.



18

(ii) Fee income from providing transaction services Fees arising from negotiating or participating in the negotiation of a transaction for a third party, such as the

arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are

recognized on completion of the underlying transaction. Fees or components of fees that are linked to a

certain performance are recognized after fulfilling the corresponding criteria.

g. Other operating income

Other operating income comprises gains or losses arising on fair value changes in trading assets and

liabilities, profit or loss on disposal of property, plant and equipment and foreign exchange differences.

h. Financial assets and financial liabilities

Date of recognition

All financial assets and liabilities are initially recognized on the trade date, i.e., the date that the Bank

becomes a party to the contractual provisions of the instrument. This includes regular way trades: purchase or

sale of financial assets that require delivery of assets within the time frame generally established by regulation

or convention in the market place.

Categorization of financial assets and liabilities

The Bank classifies its financial assets in the following categories: financial assets held at fair value through

profit or loss; loans and receivables and available-for-sale financial assets. Financial liabilities are classified

as either held at fair value through profit or loss, or at amortized cost. Management determines the

categorization of its financial assets and liabilities at initial recognition.

h (i) Financial assets and liabilities held at fair value through profit or loss

This category has two sub-categories: financial assets and liabilities held for trading, and those designated at

fair value through profit or loss at inception. A financial asset or liability is classified as trading if acquired

principally for the purpose of selling in the short term.

Financial assets and liabilities may be designated at fair value through profit or loss when the designation

eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise

from measuring assets or liabilities on a different basis, or a group of financial assets and/or liabilities is

managed and its performance evaluated on a fair value basis.



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h (ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. They are measured at amortized cost using the effective interest rate

h (iii) Available-for-sale financial assets

Available-for-sale assets are those non-derivative financial assets that are designated as available-for-sale or

are not classified as financial assets at fair value through profit or loss, loans and receivable and held to

maturity. They are measured at fair value with changes of the fair value going through equity

h (iv) Financial liabilities measured at amortized cost

This relates to all other liabilities that are not designated at fair value through profit or loss.

Initial recognition

Purchase and sale of financial assets and liabilities held at fair value through profit or loss, available-for-sale

financial assets and liabilities are recognized on trade date (the date the Bank commits to purchase or sell the

asset).

Financial assets and liabilities are initially recognized at fair value plus directly attributable transaction cost

except for those that are classified as fair value through profit or loss.

Subsequent measurement

Available-for-sale financial assets are subsequently measured at fair value with the resulting changes

recognized in equity. The fair value changes on available for sale financial assets are recycled to the income

statement when the underlying asset is sold, matured or derecognized. Financial assets and liabilities

classified as fair value through profit or loss are subsequently measured at fair value with the resulting

changes recognized in income.

Loans and receivables and other liabilities are subsequently carried at amortized cost using the effective

interest method, less impairment loss.



20

Derecognition

Financial assets are derecognized when the right to receive cash flows from the financial assets has expired

or where the Bank has transferred substantially all the risks and rewards of ownership. Any interest in the

transferred financial assets that is created or retained by the Bank is recognized as a separate asset or

liability.

Financial liabilities are derecognized when the contractual obligations are discharged, cancelled or expire.

Fair value measurement

The Bank measures fair values using the following fair value hierarchy that reflects the significance of the

inputs used in making the measurements:

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly

(i.e., derived from prices). This category includes instruments valued using quoted market prices in active

markets for similar instruments; quoted prices for identical or similar instruments in markets that are

considered less than active; or other valuation techniques where all significant inputs are directly or indirectly

observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all

instruments where the valuation technique includes inputs not based on observable data and the

unobservable inputs have a significant effect on the instrument's valuation. This category includes

instruments that are valued based on quoted prices for similar instruments where significant unobservable

adjustments or assumptions are required to reflect differences between the instruments.

The determination of fair values of quoted financial assets and financial liabilities in active markets are based

on quoted market prices or dealer price quotations. If the market for a financial asset or financial liability is not

actively traded, the Bank establishes fair value by using valuation techniques. These techniques include the

use of arms‟ length transactions, discounted cash flow analysis valuation models and techniques commonly

used by market participants.

For complex instruments such as swaps, the Bank uses proprietary models, which are usually developed from

recognized valuation models. Some or all of the inputs in these models may be derived from market prices or

rates or estimates based on assumptions.



21

The value produced by a model or other valuation technique may be adjusted to allow for a number of factors

as appropriate, because, valuation techniques cannot appropriately reflect all factors market participants take

into account when entering into a transaction. Management believes that these valuation adjustments are

necessary and appropriate to fairly state financial instruments carried at fair value on the balance sheet.

Reclassification of financial assets

For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset

that has been recognized in equity is amortized to profit or loss over the remaining life of the investment using

the EIR. Any difference between the new amortized cost and the expected cash flows is also amortized over

the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the

amount recorded in equity is recycled to the profit or loss.

Reclassification is at the election of management, and it is determined on an instrument by instrument basis.

Offsetting

Financial assets and liabilities are set off and the net amount presented in the balance sheet when, and only

when, the Bank has a legal right to set off the amounts and intends either to settle on a net basis or to realise

the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis only when permitted by the accounting standards, or for

gains and losses arising from a group of similar transactions such as in the Bank‟s trading activity.

Amortized cost measurement

The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is

measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using

the effective interest method of any difference between the initial amount recognized and the maturity amount,

minus any reduction for impairment.



22

Identification and measurement of impairment

The Bank assesses at each balance sheet date whether there is objective evidence that a financial asset or

group of financial assets are impaired. A financial asset or a group of financial assets is impaired and

impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or

more events that occurred after initial recognition of the asset (a “loss event”), and that loss event (or events)

has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be

reliably estimated.

Objective evidence that financial assets are impaired can include default or delinquency by a borrower,

restructuring of a loan and other observable data that suggests adverse changes in the payment status of the

borrower.

The Bank first assesses whether objective evidence of impairment exists individually for financial assets that

are individually significant, and individually or collectively for financial assets that are not individually

significant. If the Bank determines that no objective evidence of impairment exists for an individually

assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with

similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually

assessed for impairment and for which an impairment loss is or continues to be recognized, are not included

in a collective assessment of impairment.

If there is objective evidence that an impairment loss on a loan and receivable has been incurred, the amount

of the loss is measured as the difference between the asset‟s carrying amount and the present value of

estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the

asset‟s original effective interest rate. The carrying amount of the asset is reduced through the use of an

allowance account and the amount of the loss is recognized in the income statement. If a loan and receivable

has a variable interest rate, the discount rate for measuring any impairment loss is the current effective

interest rate determined under the contract.

The calculation of the present value of the estimated future cash flows of a collateralized financial asset

reflects the cash flows that may result from foreclosure, less cost for obtaining and selling the collateral,

whether or not foreclosure is probable. For the purposes of a collective evaluation of impairment, financial

assets are grouped on the basis of similar credit risk characteristics (i.e. on the basis of the Bank‟s grading

process which considers asset type, industry, geographical location, collateral type, past due status and other

relevant factors).



23

These characteristics are relevant to the estimation of future cash flows for group of such assets being

indicative of the debtors‟ ability to pay all amounts due according to the contractual terms of the assets being

evaluated.

Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on

the basis of historical loss experience for assets with credit risk characteristics similar to those in the Bank.

Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current

conditions that did not affect the period on which the historical loss experience is based, and to remove the

effects of conditions in the historical period that do not exist currently.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognized (such as an improvement in the

debtor‟s credit rating), the previously recognized impairment loss is reversed by adjusting the allowance

account. The amount of the reversal is recognized in the statement of profit or loss and other comprehensive

income.

Impairment losses on available-for-sale financial assets are recognized by transferring the difference between

the amortized acquisition cost and current fair value out of equity to the statement of profit or loss. When a

subsequent event causes the impairment loss on an available for sale financial asset to decrease, the

impairment loss is reversed through the income statement. However, any subsequent recovery in the fair

value of an impaired available-for-sale financial asset is recognized directly in equity.

i. Property, Plant and Equipment

Recognition and measurement

Items of property and equipment are measured at cost less accumulated depreciation and impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-

constructed assets includes the cost of materials and direct labour, and any other costs directly attributable to

bringing the asset to a working condition for its intended use. Purchased software that is integral to the

functionality of the related equipment is capitalized as part of that equipment.

When parts of an item of property and equipment have different useful lives, they are accounted for as

separate items (major components).



24

An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

The recoverable amount of assets is the greater of their net selling price and value in use. The impairment

losses are recognized in the statement of profit or loss and other comprehensive income.

Subsequent costs

The cost of replacing part of an item of property or equipment is recognized in the carrying amount of the item

if it is probable that future economic benefits embodied within the part will flow to the Bank and its cost can be

measured reliably. The costs of the day-to-day servicing of property and equipment are recognized in the

statement of profit or loss and other comprehensive income as incurred.

Depreciation is computed using the straight-line method, at the following annual rates:

Computer Software 10%

Computer Hardware 33.3%

Equipment 20%

Furniture and Fittings 15%

Motor Vehicles 25%

Land and Buildings 2%

Leasehold Property Over the remaining lease term

Repairs and maintenance are charged to the income statement when the expenditure is incurred.

Improvements to Property, Plant and Equipment are capitalized.

Gains and losses on disposal of Property, Plant and Equipment are determined by reference to their carrying

amount and are taken into account in determining net income.

j. Translation of foreign currencies

The Bank‟s functional currency is the Ghana Cedi. Transactions in currencies other than Ghana cedis are

translated at the interbank foreign exchange rates as quoted by the Association of Bankers – Ghana.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items,

are included in the statement of profit or loss and other comprehensive income. Exchange differences arising

on the retranslation of non-monetary items carried at fair value are included in the statement of profit or loss

and other comprehensive income for the period except for differences arising on the retranslation of



25

non-monetary items in respect of which gains and losses are recognized directly in shareholders‟ equity. For

such non-monetary items, any exchange component of that gain or loss is also recognized directly in the

shareholders‟ equity.

k. Reference rate

The transaction rates used are the average of the buying and selling or the underlying interbank foreign

exchange rates as quoted by Association of Bankers, Ghana.

l. Cash and cash equivalents

For the purposes of cash flow statement cash and cash equivalents include cash, non-restricted balances

with Bank of Ghana, amounts due from other banks and financial institutions and short term government

securities maturing in three months or less from the date of acquisition.

m. Leases

Leases are tested to determine whether the lease is finance or operating lease and treated accordingly.

Finance leases - leases of property, plant and equipment where the Bank has substantially all the risks and

rewards of ownership are classified as finance leases. Finance leases are capitalized at inception of the lease

at the lower of the fair value of the lease property, plant and equipment and the present value of minimum

lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a

constant periodic rate of interest on the remaining balance of the liability for each period. The corresponding

rental obligations, net of finance charges, are included on other long term borrowings. The interest element of

the finance cost is charged to the income statement over the lease period. The property, plant and equipment

acquired under finance leases is depreciated over the shorter of the useful life of the asset or the lease term.

Operating leases – leases where a significant portion of the risks and rewards of ownership are retained by

the lessor are classified as operating lease. Rentals payable under operating leases are charged to income

statement on a straight- line basis over the term of the relevant lease. Benefits received and receivable as an

incentive to enter into operating lease are also spread on a straight-line basis over the lease term.

n. Provision

Provisions for restructuring costs, legal claims and similar events are recognized when: the Bank has a

present legal or constructive obligation as a result of past events; it is more likely that an outflow of resources

will be required to settle the obligation; and the amount has been reliably estimated.



26

o. Deferred taxation

Deferred income tax is provided in full, using the liability method, on temporary differences arising between

the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income

tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement

of financial position date and are expected to apply when the related deferred income tax asset is realized or

the deferred income tax liability is settled.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be

available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and

are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

p. Current taxation

The Bank provides for corporate taxes at the current tax rates on the taxable profits of the Bank.

Current tax is the expected tax payable on the taxable income for the year, using tax rates (and laws)

that have been enacted or substantially enacted by the statement of financial position date, and any

adjustment to tax payable in respect of previous years.

q. Dividends on ordinary shares

Dividends on ordinary shares are recognized on equity in the period in which they are approved by the Bank‟s

shareholders. Dividends for the year that are declared after the statement of financial position date are dealt

with in the subsequent events notes. Interim dividends are recognized when paid.

r. Impairment of non-financial assets

The carrying amount of the Bank‟s non-financial assets, other than deferred tax assets, are reviewed at each

reporting date to determine whether there is any indication of impairment. If any such indication exists then

the assets recoverable amount is estimated.

An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount. The

recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell.

Impairment losses are recognized in the Profit or Loss and other Comprehensive income.

Impairment losses recognized in prior periods are assessed at each reporting date for any indication that the

loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the

estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that

the assets carrying amount does not exceed the carrying amount that would have been determined, net of

depreciation or amortization, if no impairment loss had been recognized.



27

s. Employee Benefits

Short-term benefits

Short-term employee benefits are amounts payable to employees that fall due wholly within twelve months

after the end of the period in which the employee renders the related service.

The cost of short-term employee benefits are recognized as an expense in the period when the economic

benefit is given, as an employment cost. Unpaid short-term employee benefits as at the end of the accounting

period are recognized as an accrued expense and any short-term benefit paid in advance are recognized as

prepayment to the extent that it will lead to a future cash refund and reduction in future cash payment.

Wages and salaries payable to employees are recognized as an expense in the income statement at gross

amount. The Bank‟s contribution to social security fund is also charged as an expense.

Pension scheme

The Bank in compliance to the National Pension Act, 2008 has in place a contributory three tier pension

scheme:

Tier One – a mandatory National Social Security Scheme, managed by the Social Security and

National Insurance Trust, under which a 13.5% contribution of employees‟ total emoluments, is made

by the bank.

Tier Two – a fully funded privately managed occupational pension scheme under which employees

contribute 5% of their total emoluments

Tier Three - The Bank has a Provident Fund Scheme for all permanent employees. Employees

contribute 5% of their basic salary to the Fund whilst the Bank contributes 5%. The Bank‟s obligation

under the plan is limited to the relevant contribution which is invested at interest rates agreed by the

trustees of the scheme and the Bank.



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Defined benefit gratuity scheme The Company has a defined benefit gratuity scheme for its employees. The company‟s net obligation in

respect of defined benefit scheme is calculated by estimating the amount of future benefit that employees

have earned in return for their service in the current and prior periods and that benefit is discounted to

determine its present value. In determining the liability for employee benefits under the defined benefit

scheme, consideration is given to future increases in salary rates and the company's experience with staff

turnover.

The recognized liability is determined by an independent actuarial valuation every year using the unit credit

method. Actuarial gains and losses arising from differences between the actual and expected out come in the

valuation of the obligation are recognized fully in Other Comprehensive Income. The effect of any curtailment

is recognized in full in the statement of Comprehensive income immediately the curtailment occurs. The

discount rate is the yield on Government of Ghana issued bonds that have maturity dates approximating the

terms of the company‟s obligation. Although the scheme is not funded, the company ensures that adequate

arrangements are in place to meet its obligations under the scheme.

Other long-term employee benefits

The company‟s other long-term employee benefits represents Long Service Awards scheme instituted for all

its employees. The company‟s obligations in respect of these schemes are the amount of future benefits that

employees have earned in return for their service in the current and prior periods. The benefit is discounted to

determine its present value. The discount rate is the yield at the reporting date on Government of Ghana

issued bonds that have maturity dates approximating the term of the company‟s obligation. The calculation is

performed using the Projected Unit Credit method.

t. Events after the Reporting date

The Bank adjusts the amounts recognized in its financial statements to reflect events that provide evidence of

conditions that existed at the statement of financial position date.

Where there are material events that are indicative of conditions that arose after the statement of financial

position date, the Bank discloses, by way of note, the nature of the event and the estimate of its financial

effect, or a statement that such an estimate cannot be made.

u. Financial Guarantees

Financial guarantees are contracts that require the Bank to make specified payments to reimburse the holder

for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms

of a debt instrument.



29

Financial guarantees are initially recognized at their fair value, and the fair value is amortized over the life of

the financial guarantee. The financial guarantees are subsequently carried at the higher of the amortized

amount and the present value of any expected payment (when a payment under the guarantee has become

probable).

v. Application of new and revised International Financial Reporting Standards (IFRSs)

At the date of authorization of these financial statements the following standards, amendments to existing

standards and interpretations were in issue, but not yet effective. The application of these standards and

interpretation did not have any material impact on financial statement.

IFRS 9 “Financial Instruments” (effective for annual periods beginning on or after 1st January 2018).

Classification and Measurement - IFRS 9 introduces new approach for the classification of financial assets,

which is driven by cash flow characteristics and the business model in which an asset is held. This single,

principle-based approach replaces existing rule-based requirements under IAS 39. The new model also

results in a single impairment model being applied to all financial instruments.

Impairment - IFRS 9 has introduced a new, expected-loss impairment model that will require more timely

recognition of expected credit losses. Specifically, the new Standard requires entities to account for expected

credit losses from when financial instruments are first recognized and to recognize full lifetime expected

losses on a more timely basis.

Hedge accounting - IFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced

disclosures about risk management activity. The new model represents a significant overhaul of hedge

accounting that aligns the accounting treatment with risk management activities.

Own credit - IFRS 9 removes the volatility in profit or loss that was caused by changes in the credit risk of

liabilities elected to be measured at fair value. This change in accounting means that gains caused by the

deterioration of an entity‟s own credit risk on such liabilities are no longer recognized in profit or loss.



30

IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods beginning on or after 1st January 2016).

IFRS 14 “Regulatory Deferral Accounts” issued by IASB on 30 January 2015. This Standard is intended to

allow entities that are first-time adopters of IFRS, and that currently recognize regulatory deferral accounts in

accordance with their previous GAAP, to continue to do so upon transition to IFRS.

IFRS 15 “Revenue from Contracts with Customers” and further amendments (effective for annual periods

beginning on or after 1st January 2018).

IFRS 15 “Revenue from Contracts with Customers” issued by IASB on 28 May 2015 (on 11 September 2016

IASB deferred effective date of IFRS 15 to 1st January 2018). IFRS 15 specifies how and when an IFRS

reporter will recognize revenue as well as requiring such entities to provide users of financial statements with

more informative, relevant disclosures. The standard supersedes IAS 18 “Revenue”, IAS 11 “Construction

Contracts” and a number of revenue-related interpretations. Application of the standard is mandatory for all

IFRS reporters and it applies to nearly all contracts with customers: the main exceptions are leases, financial

instruments and insurance contracts. The core principle of the new Standard is for companies to recognize

revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that

is, payment) to which the company expects to be entitled in exchange for those goods or services. The new

Standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were

not previously addressed comprehensively (for example, service revenue and contract modifications) and

improve guidance for multiple-element arrangements.

Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and

Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and

further amendments (effective date was deferred indefinitely until the research project on the equity method

has been concluded).

Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and

Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture issued

by IASB on 11 September 2015 (on 17 December 2016 IASB deferred indefinitely effective date). The

amendments address a conflict between the requirements of IAS 28 and IFRS 10 and clarify that in a

transaction involving an associate or joint venture the extent of gain or loss recognition depends on whether

the assets sold or contributed constitute a business.

Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other

Entities” and IAS 28 “Investments in Associates and Joint Ventures” - Investment Entities: Applying the



31

Consolidation Exception (effective for annual periods beginning on or after 1st January 2016).

Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other

Entities” and IAS 28 “Investments in Associates and Joint Ventures” - Investment Entities: Applying the

Consolidation Exception issued by IASB on 18 December 2015. The narrow-scope amendments to IFRS 10,

IFRS 12 and IAS 28 introduce clarifications to the requirements when accounting for investment entities. The

amendments also provide relief in particular circumstances.

Amendments to IFRS 11 “Joint Arrangements” – Accounting for Acquisitions of Interests in Joint Operations

(effective for annual periods beginning on or after 1st January 2016).

Amendments to IFRS 11 “Joint Arrangements” – Accounting for Acquisitions of Interests in Joint Operations

issued by IASB on 6 May 2015. The amendments add new guidance on how to account for the acquisition of

an interest in a joint operation that constitutes a business. The amendments specify the appropriate

accounting treatment for such acquisitions.

Amendments to IAS 1 “Presentation of Financial Statements” - Disclosure Initiative (effective for annual

periods beginning on or after 1st January 2016).

Amendments to IAS 1 “Presentation of Financial Statements” - Disclosure Initiative issued by IASB on 18

December 2015. The amendments to IAS 1 are designed to further encourage companies to apply

professional judgement in determining what information to disclose in their financial statements. For example,

the amendments make clear that materiality applies to the whole of financial statements and that the inclusion

of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments

clarify that companies should use professional judgement in determining where and in what order information

is presented in the financial disclosures.

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” - Clarification of

Acceptable Methods of Depreciation and Amortization (effective for annual periods beginning on or after 1st

January 2016).



32

Standards and Interpretations in issue not yet adopted - continued

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” - Clarification of

Acceptable Methods of Depreciation and Amortization issued by IASB on 12 May 2015. Amendments clarify

that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because

revenue generated by an activity that includes the use of an asset generally reflects factors other than the

consumption of the economic benefits embodied in the asset. Amendments also clarify that revenue is

generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits

embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstance.

Amendments to IAS 16 “Property, Plant and Equipment” and IAS 41 “Agriculture” - Agriculture: Bearer Plants


Amendments to IAS 16 “Property, Plant and Equipment” and IAS 41 “Agriculture” - Agriculture: Bearer Plants

issued by IASB on 30 June 2015. The amendments bring bearer plants, which are used solely to grow

produce, into the scope of IAS 16 so that they are accounted for in the same way as property, plant and

equipment

Amendments to IAS 27 “Separate Financial Statements” - Equity Method in Separate Financial Statements


Amendments to IAS 27 “Separate Financial Statements” - Equity Method in Separate Financial Statements

issued by IASB on 12 August 2015. The amendments reinstate the equity method as an accounting option for

investments in in subsidiaries, joint ventures and associates in an entity's separate financial statements.

Amendments to various standards “Improvements to IFRSs (cycle 2012-2015)” issued by IASB on 25

September 2015. Amendments to various standards and interpretations resulting from the annual

improvement project of IFRS (IFRS 5, IFRS 7, IAS 19 and IAS 34) primarily with a view to removing

inconsistencies and clarifying wording. The revisions clarify the required accounting recognition in cases

where free interpretation used to be permitted. Changes include new or revised requirements regarding: (i)

changes in methods of disposal; (ii) servicing contracts; (iii) applicability of the amendments to IFRS 7 to

condensed interim financial statements; (iv) discount rate: regional market issue; (v) disclosure of information

'elsewhere in the interim financial report'. The amendments are to be applied for annual periods beginning on

or after 1st January 2016.



33

2. Interest income

Classification 2016 2015

GHS GHS

Loans and advances 1,131,457,776 499,800,872

Placement and special deposits 110,534,506 44,999,958

Investment securities 105,891,142 87,999,170

1,347,883,423 632,800,000

No interest has been accrued on impaired loans for the year (2015: nil) 3. Interest expense

2016 2015

GHS GHS

Current account 23,936,095 13,072,406

Time and other deposits 557,856,433 292,643,840

Borrowings 462,961,767 190,231,639

1,044,754,294 495,947,885

4 Fee & Commission Income

2016 2015

GHS GHS

Foreign transfers & LCs 15,077,547 15,703,984 Loan processing fees 11,531,829 22,302,176 Commission on turnover 121,916 351,863 Commission on clearing 612,967 340,005 Other commissions 12,940,408 5,544,470

40,284,666 44,242,498

The reported credit related fees and commissions are those which are not regarded as part of the effective interest rate on loans.



34

5a Trading Income 2016 2015

GHS GHS

Forex Trading 49,391,371 55,217,502

2016 2015 5b Operating Income GHS GHS

Revaluation Gain/(loss) on foreign currency 120,313 22,632,813

Rent from Premises Sub-let - 25,530

120,313 22,658,343

6. Other expenses

2016 2015

GHS GHS

Advertising & marketing 20,722,750 23,700,872

Administrative expenses 132,634,544 93,735,206

Directors‟ emoluments: Executive 3,397,951 2,789,836

Non-executive 352,875 411,225

Auditors‟ remuneration 228,000 200,000

Rent 16,377,089 9,552,341

173,713,208 130,389,480

7. Personnel expenses 2016 2015

GHS GHS

Staff salaries & allowance 49,302,466 36,312,849 Social Security cost 5,211,527 3,888,293

Other staff benefits 8,523,364 5,999,186

63,037,357 46,200,328

8. Impairment loss

2016

2015

GHS GHS

Specific impairment charges 81,571,957 12,363,501

Portfolio impairment charges/(Gain) (1,324,386) 8,318,676

Charge for the year 80,247,571 20,682,177



35

9. Taxation a. Current tax

2016 2015

GHS GHS

Balance at 1st January 54,392 (857,043) Prior year adjustment (under provision) - 1,054,927 Charge for the year 12,074,916 8,672,897

Payments (10,958,952) ,816,389)

1,170,356 54,392 b. Deferred tax 2016 2015

GHS GHS

Balance at 1st January 4,735,154 3,631,745

Charge to profit or loss 2,654,174 1,103,409

-

Balance at 31st December 7,389,328 4,735,154

9c

National Fiscal Stabilization Levy

2016 2015

Balance at 1 January 167,325 455,836

Charge for the year 2,984,435 2,566,326

Payments (2,820,713) (2,854,837)

----------------------- -------------------

Balance at 31 December 331,047 167,325

============= ===========



36

d. Income tax expense

2016 2015

GH¢ GH¢

Profit before income tax 59,688,694 51,326,509

Tax at applicable tax rate at 25% 14,922,174 12,831,627

Tax effect of non-deductible expenses (353) 408,555

Tax effect of non-chargeable income 234,169 (3,200,293)

Tax effect of allowable expenditure - (1,285,665)

Tax effect on capital allowance - 1,022,081

Origination/reversal of temporary (390,320) -

14,765,669 9,776,305

25% 19%



37

10. Cash and cash equivalent 2016 2015

GHS GHS

Cash on hand 65,224,154 31,772,826

Balances with other Banks (Nostro) 20,542,729 21,546,521

Balances with Bank of Ghana 539,363,701 317,566,199

Money market placement 858,828,322 273,768,860

Items in Course of collection 19,457,064 16,753,842

1,503,415,970 661,408,248

11. Trading assets

2016 2015

GHS GHS

Pledged Non Pledged Total Pledged Non Pledged Total

Government bonds - 5,001,952 5,001,952 - 5,298,664 5,298,664

Treasury bills 511,600,274 433,076,795 944,677,069 42,945,935 338,579,557 381,525,492

511,600,274 438,078,747 949,679,021 42,945,935 343,878,221 386,824,156

These are fixed rate Government of Ghana securities maturing between 2017 and 2021. The average rate of return on these instruments is 22.28%. Treasury bills is made up of 91d bills of GHS823,331,432 and other bills of GHS121,345,637.



38

12. Loans and advances to customers Analysis by type

2016 2015

GHS GHS

Overdrafts

682,479,705 914,629,034

Term Loans

2,326,775,670 1,604,030,677

Gross loans & advances

3,009,255,375 2,518,659,711

Impairment Allowance (13a)

(123,716,598) (43,469,027)

Net loans & advances

2,885,538,777 2,475,190,684

Analysis by business segment

Agriculture, forestry and fishing

4,516,446 3,632,748

Mining and quarrying

77,926,112 38,921,635 Manufacturing

81,567,690 32,431,645

Construction

754,355,187 537,713,778 Electricity, gas and water

227,189,720 640,429,242

Commerce and finance

655,418,764 502,727,092 Transport, storage and communication

300,498,883 207,665,374

Services

727,648,509 288,067,822 Miscellaneous

180,134,065 267,070,375

3,009,255,375 2,518,659,711

Analysis by type of customers

Individuals

219,924,049 173,250,022

Private enterprises

2,739,633,955 2,309,258,666 Staff

49,697,371 36,151,023

3,009,255,375 2,518,659,711

a. Movement in bank’s provisions for impairment are as follows:

2016 2015

GHS GHS

Balance brought forward

43,469,027 22,786,850

Impairment (Note 8)

80,247,571 20,682,177

123,716,598 43,469,027



39

2016 2015

b. Loans and advances measured at amortized cost GHS GHS

Gross Loans and advances 3,009,255,375 2,518,659,711

Interest receivable 189,576,520 126,324,986

3,198,831,895 2,644,984,697

13. Other asset

2016 2015

GHS GHS

Stocks

370,477 549,386 Interest receivables

189,576,520 126,324,986

Deposits and prepaid expenses

12,167,383 11,400,817 Others (Note 14a)

27,199,132 13,222,319

229,313,512 151,497,508 a. Analysis of others

Sundry debtors

8,461,285 1,633,202

Security deposit – Mastercard

1,050,050 948,750 Deposit for Asset (advance payment)

4,484,431 5,096,270

Sigue Money Transfer

- 86388 Moneygram Money Transfer

3,392,658 -

Express Money Transfer

929,400 -

Western Union Money Transfer

1,096,498 41254 Ghana Post

50,000 50000

Security Deposit Ghana Leasing

1,014,687 1,014,687 Small World Money Transfer

1,980,822 521,815

RIA Money Transfer

15,532 72,961 Biometric Passport Forms

315,015 26,537

Due Commission (Contingent)

279,992 - Cash Collateral – Ghana International Bank 4,128,763 3730455

27,199,132 13,222,319



40

14a. Property, Plant and Equipment

Freehold Land &

Buildings

Leasehold Land

& Buildings

Computer

Software

Computers

Equipment

Furniture

& Fittings

Motor

Vehicles

Work in

Progress

Total

Cost/Revaluation GHS GHS GHS GHS GHS GHS GHS GHS GHS


14,557,812

83,328,057

8,628,444

4,611,772

17,863,744

4,254,152

8,126,463

37,021,888

178,392,332

Additions/Transfers during the year

18,747,020

2,361,748

1,609,848

13,068,892

1,651,112

127,778

(1,894,695)

35,671,703

Disposals

(3,000)

-

-

(747,540)

-

(750,540)

Adjustment - - - - - - - - -

Balance as at 31st December 2016

14,557,812

102,075,077

10,990,192

6,218,621

30,932,636

5,905,264

7,506,701

35,127,193

213,313,495

Depreciation


571,928

8,419,559

2,336,427

2,174,049

4,269,627

1,097,561

3,511,311

-

22,380,462

Disposals

(2,083)

(546,792)

-

(548,875)

Charge for the year

241,029

6,035,406

829,082

1,673,052

5,102,346

717,756

1,639,978

___________

16,238,648

Balance as at 31st December 2016

812,957

14,454,965

3,165,509

3,845,018

9,371,973

1,815,317

4,604,498

___________-

38,070,235

NBV as at 31st December 2016

13,744,855

87,620,112

7,824,683

2,373,602

21,560,663

4,089,947

2,902,203

35,127,193

175,243,260

Disposal Cost Accum. Deprn. NBV Proceeds Profit/loss

GHS GHS GHS GHS GHS

Computers

3,000

2,083

917

- -

Motor Vehicle

747,540

546,792

200,748

- -

750,540

548,875

201,665

-

-



41

14b. Property, Plant and Equipment

Freehold Land & Buildings

Leasehold Land & Buildings

Computer Software

Computers

Equipment

Furniture & Fittings

Motor Vehicles

Work in Progress

Total

Cost/Revaluation GHS GHS GHS GHS GHS GHS GHS GHS GHS


22,029,388

81,429,324

4,347,568

2,993,567

11,598,265

3,449,476

5,890,077

42,734,611

174,472,276

Additions during the year -

17,089,646

4,280,876

1,618,205

6,265,479

804,676

2,430,188

4,481,292

36,970,362

Disposals

(7,471,576)

(15,190,913) - - - -

(193,802)

-

(22,856,291)

Adjustment - - - - - - - (10,194,015) (10,194,015)

Balance as at 31st December 2015 14,557,812 83,328,057 8,628,444 4,611,772 17,863,744 4,254,152 8,126,463 37,021,888 178,392,332

Depreciation


543,039

5,958,249

1,632,750

948,301

1,304,723

512,089

2,078,984

-

12,978,135

Disposals

(274,403)

(586,799) - - - -

(108,435) -

(969,637)

Charge for the year

303,292

3,048,109

703,677

1,225,748

2,964,904

585,472

1,540,762 -

10,371,964

Balance as at 31st December 2015 571,928 8,419,559 2,336,427 2,174,049 4,269,627 1,097,561 3,511,311 _________- 22,380,462

NBV as at 31st December 2015 13,985,884 74,908,498 6,292,017 2,437,723 13,594,117 3,156,591 4,615,152 37,021,888 156,011,870

Disposal Cost Accum. Deprn. NBV Proceeds Profit/loss

GHS GHS GHS GHS GHS

Freehold land & building

7,471,576

274,403

7,197,173

(7,197,173)

-

Leasehold land & building

15,190,913

586,799

14,604,114

(14,604,114)

-

Motor Vehicle

193,802

108,435

85,367

(85,367)

-

Work-in-progress

10,194,015

-

10,194,015

(10,194,015) -

33,050,306

969,637

32,080,669

(32,080,669) -



42

15. Deposits from customers 2016 2015

GHS GHS

Current accounts 951,964,666 827,444,434

Time deposit 1,469,617,376 1,755,526,167

Savings deposit 194,296,990 145,171,588

2,615,879,033 2,728,142,189

Analysis by type of Depositors

Financial Institutions 275,079,966 281,695,038.

Individuals and other Private Enterprises 1,756,174,892 1,598,077,688.

Public Enterprises 584,624,175 848,369,463

2,615,879,033 2,728,142,189

Ratio of 20 largest depositors total deposits 0.37 0.48 16. Borrowings

2016

2015

GHS GHS

Interbank market 2,008,839,200 478,807,900

Commercial paper issue 26,850,000 13,050,000

Managed Fund 76,815 76,815

GIB Loan - 34,787,500

Shelter Afrique - 24,667,500

ResponsAbility 75,603,600 68,310,000

European Investment Bank 40,042,419 40,820,060

African Development Bank 63,003,000 -

Mauritius Commercial Bank 42,002,000 -

African Export Bank 52,240,513 -

Symbiotics 22,518,850 -

Cargill 63,003,000 -

2,394,179,397

660,519,775

The interbank market are borrowings from other banks which attracts an average interest rate of 25.02%.



43

a. Analysis of Borrowings

2016

2015

GHS GHS

Due within one year

2,215,453,563

555,511,574

Due after one year 178,725,834 105,008,201

2,394,179,397

660,519,775

Terms and conditions of Foreign Loans: These were loans of US$18 million at rate of USD 6-month libor plus five hundred and fifty basis point for two years and US$10.7 million with floating rate plus 2% (200 basis points) for 8 years from Responsibility and European Investment Bank respectively. The Bank contracted additional loans of US$ 15 million at a rate of 6.52% for 3 years, US$ 10 million at a rate of 5.09% for 1 year, US$ 12.4 million at a rate of 6.37% for 1 year nine months and US$ 3 million at a rate of 6.25% for 6 months from African Development Bank, Mauritius Commercial Bank, African Export Bank and Symbiotic respectively. Additionally, an amount of GHS 9.9 million at a rate of 27.1% for 6 months was borrowed from Symbiotic. During the year the Ghana International Bank (GIB) and Shelter Afrique loans were paid off. None of the bank assets was used to secure these loans. The Bank has not had any default of principal, interest or other breaches with regard to any of the bank‟s liabilities. . 17 Other Liabilities 2016 2015

GHS GHS

Interest payable 187,642,006 96,600,292 Payment orders 5,863,905 8,209,090 Banker‟s payments 4,294 5,679 Margin account 1,220,144 2,556,578 Other creditors and accruals (19a) 48,178,539 25,209,852 Deferred Income – Loan Processing Fee 3,575,936 3,950,755

246,484,824 136,532,246



44

17a.

Included in other creditors and accruals is the obligation for the company's long service scheme. The

Actuarial valuation of the present value of the defined benefit obligation were carried out at 31

December 2016 by Mr. Isaac Senior Damptey, ACIA, ASA, ACA. The present value of the defined

benefit obligation and the related service cost were measured using the projected unit credit method.

The principal assumptions used for the purposes of the actuarial valuations were as follows;

Mortality: The RP 2000 Mortality Table

Salary Scale: Salaries are assumed to increase at an annual average rate of 10%.

Inflation Rate: An average inflation rate of 15.4%.

Discount Rate: A discount rate of 14.5%.

Asset Return/ Investment Yield: An investment yield rate of 22%.

Turnover Rate: A turnover rate of 5% is assumed

Retirement Age: Retirement age is set at age 60

PRINCIPAL RESULTS OF VALUATION

01-Jan-16 Service

Cost

Net

interest

expense

Sub-total

included in

profit or

loss

Benefits

paid

Return on

plan

assets(exclu

ding

amounts

included in

net interest

expense)

Actuarial

changes

arising

from

changes in

demograp

hic

assumptio

ns

Actuarial

changes

arising

from

changes

in

financial

assumpti

ons

Experi-

ence

adjust

ments

Sub-

total

includ

ed in

OCI

Contri-

bution

s by

emplo

yer

31-Dec-16

544,458 35,308 126,994 162,302 120,000 - - - - - - 586,760

Pension cost charged to profit or loss Remeasurement gains/(losses) in other comprehensive income



45

SENSITIVITY ANALYSIS

Discount rate 22.00% 19.80% 24.20% 22.00% 22.00% Salary increase 15.00% 15.00% 15.00% 13.50% 16.50% Defined Benefit Obligation 586,760 586,801 557,383 585,880 586,786 Current Service Cost 35,308 35,310 35,305 35,310 35,310 As % of monthly Salaries 10% 10% 10% 10% 10% Number of Employees 803 803 803 803 803 Monthly Basic Salaries (GHS) 3,432,559 3,432,559 3,432,559 3,432,559 3,432,559 18. Stated Capital

a. Authorised Shares of no par value

2016 2015

Issued and fully paid: 100,000,000

100,000,000

Number Value Number Value

GHS

GHS

Ordinary Shares:

Issued for Cash Consideration 119,002,836 261,919,503 62,752,835 126,919,503

Issued for Consideration other than cash 2,245,352 2,245,352 2,245,352 2,245,352

Transfer from Income Surplus 7,506,701 15,965,035 7,506,702 15,965,035

128,754,889 280,129,890 72,504,889 145,129,890

Preference Shares

Issued for Cash Consideration 1,500 15,000,000 1,500 15,000,000

295,129,890

160,129,890

Ordinary Shares issued for Consideration other than cash are equity injections in the form of Landed properties with values of GHS206,352, GHS1,539,000, and GHS500,000 which were brought in 2001, 2004 and 2008 respectively.



46

b. Shareholding Structure

Value Number Percentage

Ordinary Shares

GHS of Shares Shareholding

Integrated Properties Limited

41,757,638 21,710,770 16.86%

Telemedia Company Limited

35,565,062 18,656,111 14.49%

Dr. Kwabena Duffuor

26,715,538 14,600,490 11.34%

Crown Insurance Brokers Limited

1,071,064 854,428 0.66%

HODA Holdings Limited

175,000,000 72,916,667 56.63%

Aaron M. Ocquaye & Others

11,339 9,045 0.01%

Seth Adom-Asomaning

9,249 7,378 0.01%

Total

280,129,890 128,754,889 100

Preference Shares

Dr. Kwabena Duffuor

11,500,000 1,150 76.67%

Crown Insurance Brokers Limited

3,500,000 350 23.33%

Total

15,000,000 1,500 100

Stated Capital

295,129,890

Conditions on Preference Shares Preference Shares are non-cumulative and irredeemable of no par value issued for a consideration of GHS10,000.00 (Ten thousand Ghana cedis) per share. Each preference share shall attract dividend at the rate of 17% per annum 19a. Revaluation reserve This relates to revaluations of the Bank's property, plant and equipment.

2016 2015

Balance at 1st January

22,620,091 22,620,091

19b. Statutory Reserve Fund This represents the cumulative amounts set aside as a non-distributable reserve from annual net profit after tax in accordance with Section 29 (1) of the Banking Act, 2016 (Act 930 The amounts transferred annually range from 12.5% to 50% of net profit after tax.



47

20. Regulatory Credit Risk Reserve

Regulatiry Credit Risk Reserve

2016 2015

Balance at 1 January 13,853,226 11,934,326

Provision as per BOG Classification 85,834,312 22,601,077

IFRS impairment (80,247,571) (20,682,177)

Regulatory credit risk 5,586,741 1,918,900

Balance at 31 December 19,439,968 13,853,226

This represents the excess of provision for bad and doubtful debts in respect of loans as per Bank of Ghana guidelines and loan impairment loss provision as per IFRS 21. Income Surplus This represents the residual of cumulative annual profits that are available for distribution to shareholders. 22. Cash and cash equivalents For the purposes of the cash flow statements, cash and cash equivalents comprise balances with less than 91 days maturity from the date of acquisition.

Interbank borrowing (note 16) (2,008,839,200) (478,807,900)

317,908,202 440,652,144



48

23. Contingents & Commitments

In common with other Banks, the Bank conducts business involving acceptances, guarantees, performance bonds and indemnities. The majority of these facilities are offset by corresponding obligations to third parties.

As at 31st December, 2016 the Bank has contingencies and commitments as follows:

2016 2015

GHS GHS

Bonds and Guarantees

21,727,083 31,107,589

Letters of Credit

155,108,933 104,836,012

176,836,016 135,943,601

Nature of contingent liabilities

Letters of credit commit the Bank to make payment to third parties, on production of documents, which are subsequently reimbursed by customers. Guarantees are generally written by the Bank to support performance by a customer to third parties. The Bank will only be required to meet these obligations in the event of the customer's default. As at the year end, there has been no default by any customer.

24 Related parties 2016 2016 2015 2015 Group during the period are as follows: Maximum Bal. Closing Bal. Maximum Bal. Closing Bal. GHS GHS GHS GHS Mortgage lending and other secured loans 459,419 435,811 295,085 276,348 Other Loans 253,829 105,536 164,009 138,746 Total

713,248

514,347

459,094

415,094



49

Interest rates charged on balances outstanding are at an arm‟s length transaction. The mortgages and secured

loans granted are secured over property of the respective borrowers. Other balances are secured by staff

provident fund. No impairment losses have been recorded against balances outstanding during the period with key

management personnel, and no specific allowance has been made for impairment losses on balances with key

management personnel and their immediate relatives at the period end.

Key management personnel compensation for the period comprised:

2016 2015

Short-term employee benefits

Long-service leave

3,397,951

2,789,836

Post-employment benefits

- -

In addition to their salaries, the Bank also provides non-cash benefits to directors and executive officers.

2016 2015

(a) Loans and advances to employees

Balance at 1 January

36,151,023 26,975,668

Loans advanced during the year

27,980,095 22,581,638

Loan repayments received

(14,458,348)

(13,406,283)

Balance at 31 December

49,672,770 36,151,023

(b) Loan and advances to directors and their associates

The Bank has entered into transactions with its directors and their associates as

follows:

2016 2015

Gross amount at 1 January

GHS 789,939

GHS 303,842

Interest charged

276,479 121,537

Loans disbursed

150,000 420,000

Cash received

(675,071) (55,440)

Net amount at 31 December

541,347 789,939

All the transactions with related parties are priced at arm‟s length basis and have been entered into in the normal course

of business.



50

2016 2015

25. Operating Expenses

GHS GHS

Staff Cost

Salaries

40,351,065 29,741,988

Allowances

8,951,401 6,570,863

Social security

5,211,527 3,888,293

Provident Fund

1,809,137 1,313,769

Employees Gratuity Scheme

162,302 -

Medical

4,041,971 2,022,810

Training

2,096,527 1,665,040

National Service Allowance

123,760 215,503

Staff Welfare

289,667 782,062

Sub-Total

63,037,357 46,200,328

Other Operating Costs

Corporate Social Responsibility

6,937,981 7,403,064

Advertising & Publication

7,901,426 9,547,400

Promotion

5,835,354 6,783,620

Printing & stationery

3,779,450 2,424,170

Lease rental charges

3,509,108 6,134,572

Travel Expenses

12,475,676 9,183,598

Fuel and lubricants

19,538,565 17,152,206

Subscriptions and Fees

2,924,548 1,298,458

Software Maintenance fee - Globus

1,770,531 1,124,344

Internet and Swift Cost

3,841,770 3,747,774

Repairs & Maintenance

17,456,856 9,475,474

Insurance

933,233 887,372

Communications and Expenses

595,267 796,730

Legal fees

228,000 1,212,643

Professional Fees

5,645,698 6,709,283

Cleaning & Sanitation

2,937,956 1,760,473

Outsourced Services

14,459,443 9,944,536

Specie

5,761,754 4,114,343

Security Services

6,848,276 4,844,449

Correspondent bank charges

2,482,321 1,135,061

Other Expense

2,214,946 2,653,925

Depreciation

16,238,648 10,372,131

Directors` Emoluments - Executive

3,397,951 2,789,836

Non-Executive

352,875 411,225

Audit Fees

473,496 223,806

Rent

16,377,089 9,552,341



51

Office utilities

8,366,090 3,847,798

Repairs & Maintenance - Premises

11,860,147 2,063,927

E-Zwich Charges

26,743 42,170

e-Banking Charges

945,083 593,656

ATM Charges

2,597,813 1,104,693

Mastercard Expenses

1,237,763 1,426,366

Sub - Total

189,951,857 140,761,444

Total

252,989,213 186,961,772

Financial Risk Management

i. Introduction and Overview

The types and degree of financial risks organization may be exposed to depend largely on the size and complexity

of business activities. However, uniBank is generally exposed to credit, market, liquidity, operational, compliance,

legal, regulatory and reputational risks.

The Bank‟s risk management framework, objectives, policies, procedures and processes for identifying,

measuring, monitoring and controlling these risks, and regulatory capital management is presented below;

Risk Management Framework

The Board of Directors and Senior Management have developed and established policies and procedures to

facilitate effective risk management. These policies and procedures provide guidance on risk appetite/tolerance

limit, risk identification, monitoring and controlling and adherences to the set risk limits. The risk management

policies and procedures are reviewed periodically to reflect changes in economic and financial landscape as well

as products and services offered.

The Board of Directors has the overall responsibility for the establishment and oversight of the Bank‟s risk

management framework. The responsibilities of the Board of Directors include; setting out the Bank‟s overall risk

appetite/tolerance limit, ensuring that the Bank‟s overall risk exposure is maintained at prudent levels and

consistent with available capital. They also include; ensuring that Executive Management as well as individuals

responsible for Risk Management possess sound expertise and knowledge to accomplish the risk management

function and ensuring that appropriate policies and procedures for risk management are in place.



52

The Board of Directors has established Assets and Liability Management Committee (ALCO), Management Credit

Committee and Operational Risk Management Committee. Membership of these Committees includes Executive

Management and Heads of Departments which report on periodic basis to the Board of Directors. These

Committees are responsible for developing, implementing and monitoring of risk policies and strategies approved

by the Board.

The Board through its sub-committees on Audit and Risk Management monitors compliance with the Bank‟s risk

management strategies, policies and procedures, and periodically reviews the adequacy of the overall risk

management framework in relation to the business activities and the risk profile of the Bank.

ii. Credit Risk

Credit Risk arises from the potential that an obligor is either unwilling to perform on an obligation or its ability to

perform such obligation is impaired resulting in economic loss to the Bank. Credit Risk stems from outright default

due to inability or unwillingness of a customer or counterpart to meet commitments in relation to lending, trading

settlement and other financial transaction. Losses may also result from reduction in portfolio value due to the

actual or perceived deterioration in credit quality.

The Management Credit Committee is responsible for implementation of the credit risk policy/strategy, monitors

credit risk on a Bank-wide basis and ensures compliance with credit limits approved by the Board. To maintain

credit discipline, the Credit Risk Management Department is a separate function independent of loan origination

function. The Credit Risk Department is responsible for credit policy formulation, credit approval, credit limit setting,

monitoring of credit exceptions/exposures and reviewing/monitoring of security documentations.

Business strategies, policies and procedures for managing credit risk are determined bank-wide with specific

policies and procedures being adopted for corporate, small and medium enterprises and consumer loans.

The Bank‟s Credit Risk Rating framework incorporates both business risk and financial risk analysis using both

qualitative and quantitative factors/parameters. Among these factors/parameters are industry characteristics,

competitive position, management depth, financial condition, and profitability, and capital structure, present and

future cash flows.

A numerical grading system 1-8, with 1 being the highest quality are used to quantify the risk associated with each

counterparty within the corporate loan portfolio. For the consumer loans, standard application forms are used to

process and approve loans.



53

Managing Problem Credits

All facilities 90 days past due (excesses and overdue) or when three loan installment payments are missed are

transferred to the Monitoring and Recovery Unit. Monitoring and Recovery Unit manages and collects/regularizes

delinquent facilities after unsuccessful remedial effort by the Business Unit.

At 360 days past due, where recovery efforts are unsuccessful, the Monitoring and Debt Recovery Unit refers the

customer to contractual external collectors (for small facilities, mainly retail and SME‟s customer‟s facilities). For

large corporate and SME‟s that are supported by security, Monitoring and Recovery Unit refers the customer to the

Bank‟s Legal Department.

Loan Loss Provisioning

Loan losses are anticipated and charged against the profit and loss accounts on monthly basis. The balance in the

loan loss provision account is always equal to at least the required provisions based on the Bank‟s current credit

risk rating profile. If the loss classifications increase, the balance of the loss provision account is also increased by

an additional charge against earnings. In conformity with Bank of Ghana„s directives, the minimum provision that

are held are as follows;

Credit Risk Rating Days past Due Minimum Provision

Required (%)

Current <30 1

OLEM 31-90 10

Substandard 91-180 25

Doubtful 181-360 50

Loss Over 360 100

CREDIT RISK EXPOSURE

Maximum credit exposure

At 31st December 2016, the maximum credit risk exposure of the Bank in the event of other parties failing to

perform their obligations is detailed below. No account has been taken of any collateral held and the maximum

exposure to loss is considered to be the instruments‟ balance sheet carrying amount or, for non-derivative off-

balance sheet transactions, their contractual nominal amounts.



54

Credit Risk Exposure (Cont’d) At 31 December 2016, the maximum credit risk exposure of the Bank in the event of other parties failing to perform

their obligations is detailed below. No account has been taken of any collateral held and the maximum exposure

to loss is considered to be the instruments‟ balance sheet carrying amount or, for non-derivative off-balance sheet

transactions, their contractual nominal amounts.

2016 2015 GHS GHS

Placement with other Banks

505,733,750 273,768,860

Loans and Advances 3,051,999,471 2,539,301,580

Unsecured Contingent Liabilities and Commitments 176,836,016 135,943,601

3,734,569,236 2,949,014,041

Set out below is an analysis of various credit exposures.

Analysis by credit grade of loans and advances

Loans and receivables

Impaired loans

Individually impaired

336,748,257 51,559,820

Allowance for impairment

(81,571,957) (24,079,709)

Impaired loans, net of individual provisions 255,176,300 27,480,111

Credit grading 1-8 or equivalent 2,672,507,118 2,487,741,760

Portfolio impairment assessment Gain/ (loss) 1,334,386 (21,308,218)

Total net loans

2,673,841,504 2,466,433,542

Fair value of Collateral held The Bank holds collateral against loans and advances to customers in the form of mortgage interests over

property, other registered securities over assets, and guarantees. Estimates of fair value are based on the value

of collateral assessed at the time of borrowing, and generally are not updated except when a loan is individually

assessed as impaired.



55

An estimate of the fair value of collateral and other security enhancements held against financial assets is shown

below:

Loans and receivables

2015 2014

GHS GHS

Against impaired assets

186,280,507 3,947,912

Against past due but not impaired assets

1,651,337,514 1,102,853,841

1,837,618,021

1,106,801,753

Collateral reposed

The Bank took possession of some customer collateral during the year, and has disposed them to defray the related exposures. Commitment and guarantees

The Bank‟s maximum credit risk exposure for commitment and guarantees amounts to GHS176, 836,016 (2015

GHS135, 943,601).

iii. Market Risk

Market risk is the potential for loss resulting from adverse movement in risk factors such as interest rates, foreign

exchange rates, and equity and commodity prices.

The Bank‟s Assets and Liability Committee (ALCO) has oversight of the market risk management. The ALCO

defines the standards and methodologies for market risk management and provides a second level control over

the operating units.

The Bank‟s Market Risk Unit (under the supervision of the ALCO) is responsible for the management of the Bank‟s

market risk. The Unit provides oversight and guidance on policy setting, limit setting, funding, and currency and

counterparty concentrations. The Unit also carries daily analysis (independent of the front office) of the exposures

and risk incurred by the Bank and comparison of said exposures and risk with the set limits.



56

Interest Rate Risk

In order to quantify the Bank‟s exposures to structural interest rate risk, assets and liabilities with fixed and floating

rates are analyzed to identify any gap. Maturities on outstanding positions are determined on the basis of

contractual terms governing transactions, model based on historic client behavioral patterns (special saving

accounts, early repayments, etc), as well as conventional assumptions relating to certain aggregate (principally

shareholders‟ equity and sight deposits). Once the Bank identifies its gap, the variation in the net present value of

the fixed-rate position corresponding to an immediate parallel shift of 1% in the yield curve is calculated. Also,

analyses are performed on scenarios of potential variations in the net interest income.

A change of a 100 basis points in interest rates at the reporting date would have impacted equity and profit or loss

by the amounts shown below:

100 bp Increase 100 bp Decrease

31st December 2016 GHS GHS

Interest income impact 47,284,591 (47,284,591)

Interest expense impact (50,100,584) 50,100,584

Net impact (2,815,992) 2,815,992

100 bp Increase 100 bp Decrease

31st December 2015 GHS GHS

Interest income impact (6,051,086) 6,051,086

Interest expense impact (7,146,131) 7,146,131

Net impact (13,197,217) 13,197,217



57

Liquidity Risk

The Bank‟s liquidity risk management systems comprise two main processes;

1. the assessment of the Bank‟s financing requirements on the basis of budgets and forecasts in order to

plan appropriate funding sources;

2. the analysis of liquidity risk using liquidity crisis scenarios.

The risk analysis is conducted for both on and off statement of financial position items according to currency of

denomination and residual maturity. The principle here is to list assets and liabilities due dates by maturity.

Maturities on outstanding positions are determined on the basis of contractual terms governing transactions, model

based on historic client behavioral patterns as well as conventional assumptions relating to certain assets and

liabilities.



58

0 - 3 Months

GHS

3 - 6 Months

GHS

6 - 12 Months

GHS

Over 1 Year

GHS Total GHS

Assets

Cash & cash equivalent 877,860,725 225,096,636 53248946 347209663 1,503,415,970

Trading assets (pledged&non-pledged) 815,319,884 122,566,463 4765927 7,026,747 949,679,021

Loans & advances (net) 1,268,903,983 547,303,671 551,949,909 517,381,214 2,885,538,777

Other assets 139,809,352 30,406,265 30,664,395 28,433,500 229,313,512

Property, Plant & Equipment - - - 175,243,260 175,243,260

Total Assets 3,101,893,944 925,373,035 640,629,177 1,075,294,384 5,743,190,540

Liabilites

Customer Deposits 1,081,228,207 550,992,250 506,541,795 477,116,781 2,615,879,033

Borrowings 2,037,258,050 19,050,000 159,145,513 178,725,834 2,394,179,397

Other liabilities 97,428,315 31,273,667 62,547,335 55,235,507 246,484,824

Deffered Tax - - - 7,389,328 7,389,328

Current Tax Liability 1,170,356 - - - 1,170,356

National Fiscal Stabilisation Levy 331,047 - - - 331,047

Total Liabilities 3,217,415,975 601,315,917 728,234,643 718,467,450 5,265,433,985

Net Liquidity Gap -115,522,031 324,057,118 -87,605,466 356,826,934 477,756,555

Maturity Analyis of Assets and Liabilities as at 31 December 2016



59

0 - 3 Months

3 - 6

Months 6 - 12 Months Over 1 Year Total

Assets GHS GHS GHS GHS GHS

Cash & cash equivalent 593,098,248 68,310,000 - - 661,408,248

Trading assets (pledged&non-pledged) 302,197,035 79,328,457 - 5,298,664 386,824,156

Loans & advances (net) 955,207,142 365,177,354 617,025,550 537,780,638 2,475,190,684

Other assets 2,804,011 223,354 38,658,938 109,811,205 151,497,508

Property, Plant & Equipment - - - 156,011,870 156,011,870

Total Assets 1,853,306,436 513,039,165 655,684,488 808,902,377 3,830,932,466

Liabilites

Customer Deposits 1,304,434,777 440,177,880 611,960,468 371,569,064 2,728,142,189

Borrow ings 526,558,898 18,254,042 8,236,149 107,470,686 660,519,775

Other liabilities 62,620,935 33,299,821 26,870,823 13,740,667 136,532,246

Deffered Tax - - - 4,735,154 4,735,154

Current Tax Liability 54,392 - - - 54,392

National Fiscal Stabilisation Levy 167,325 - - - 167,325

Total Liabilities 1,893,836,327 491,731,743 647,067,440 497,515,571 3,530,151,081

Net Liquidity Gap -40,529,891 21,307,422 8,617,048 311,386,806 300,781,385

Maturity Analyis of Assets and Liabilities as at 31 December 2015



60

The table below shows the contractual expiry by maturity of the Bank‟s contingent liabilities and

commitments. Each undrawn loan commitment is included in the time band containing the earliest date it

can be drawn down. For issued financial guarantee contracts, the maximum amount of the guarantee is

allocated to the earliest period in which the guarantee could be called.

2016 On demand

Less than

3 Months

3 - 12

Months

Over 12

Months Total

GHS GHS GHS GHS GHS

Financial guarantees - 5,982,261 4,274,876 11,469,945 21,727,083

Letters of credit - 145,018,045 10,090,888 - 155,108,933

Other commitments and guarantees - - - - -

Total - 151,000,307 14,365,764 11,469,945 176,836,016

2015

On

demand

Less than

3 Months

3 - 12

Months

Over

12 Months Total

GHS GHS GHS GHS GHS

Financial guarantees - 2,064,500 23,012,417 6,030,673 31,107,590

Letters of credit - 79,146,890 25,689,121 - 104,836,011

Other commitments and guarantees - - - - -

Total - 81,211,390 48,701,538 6,030,673 135,943,601

Foreign Exchange Exposures

The Bank quantifies its exposures to structural exchange rate risk by analyzing all asset and liabilities

denominated in foreign currencies arising from commercial and proprietary trading. The ALCO monitors

the structural exchange rate positions and the open position ratios set by the Bank of Ghana and closes

out the Bank‟s position within individually predetermined limits.

The Bank always seeks to minimize the impact of fluctuations in strong currencies to its net-worth by

maintaining both the single currency and aggregate net open position ratios within the regulatory and

prudential limits. The Bank complied with both the single currency and the aggregate net open position

requirements throughout the period.

A 5% strengthening of the cedi against the following currencies at 31st December 2016 would have

impacted equity and profit or loss by the amounts shown below. This analysis assumes that all other

variables, in particular interest rates, remain constant. The analysis is performed on the same basis for

2015.



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Sensitivity analysis Effect in cedis

GHS

31st December 2016

Profit/(Loss)

USD

511,965

GBP

(412,957)

EUR

(93,622)

31st December 2015

USD

770,331

GBP

421,836.

EUR

(379,729)

A best case scenario 5% weakening of the Ghana cedi against the above currencies at 31st December

would have had the equal but opposite effect on the above currencies to the amounts shown above, on

the basis that all other variables remain constant.



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CONCENTRATION OF ASSETS, LIABILITIES AND OFF BALANCE SHEET ITEMS

The Bank takes on exposure to the effects of fluctuations in prevailing foreign currency exchange on its financial

position and the cash flows. The table below summarizes the Bank‟s exposure to foreign currency rate risks as

at 31st December 2016.

Included in the table are the Bank‟s assets, liabilities, and off Balance Sheet items at carrying amounts

categorized by currency. The amounts stated in the table are the Cedi equivalents of foreign currencies.

As at 31 December 2016

British

Assets US Dollar Pound Euro Yen

GHS GHS GHS GHS

Cash & cash equivalent 329,194,221 20,263,750 1,753,852 -

Loans and Advances to Customers 522,565,570 782 8,771 -

Others Assets 39,619,755 - - -

Property, Plant and Equipment - - - -

Total Assets 891,379,546 20,264,532 1,762,623 -

Liabilities

Customer Deposits 438,089,716 11,817,771 9,322,795 -

Borrowings 415,698,332 - - -

Other Liabilities 22,184,874 10,023 34,439 -

Total Liabilities 875,972,922 11,827,794 9,357,234 -

Net on Balance Sheet Position 15,406,624 8,436,738 -7,594,611 -

Credit Commitments 159,759,954 - 8,721,647 350,060

At 31 December 2015 (10,239,301) 8,259,146 1,872,442 -

iv. Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or

from external events. It is the risk of loss arising from the potential that inadequate information systems,

breaches of internal controls, fraud, technological failure and unforeseen catastrophes may result in unexpected

loss or reputational problems.



63

Over the past two years the Bank has developed a thorough and consistent framework and policies to control

and actively manage its operational risk. The Bank‟s framework complies with the Basel Committee‟s sound

practices for the management and supervision of operational risk and Bank of Ghana‟s requirements. The

Bank‟s Operational Risk Management Committee has oversight of operational risk management. Its main tasks

are to define and implement the strategy for controlling operational risks, establish methods of measurement and

analysis and encourage the application of best practices in this regard.

Risk and Control Self-Assessment (RCSA) methodology for evaluating risks and the control environment has

been formally defined. This process is designed to alert the operating units as soon as possible if they are

vulnerable to risk so that they can react and reduce potential losses. Accordingly, the risks inherent in each

activity are defined in a risk map, and the quality and efficiency of the corresponding prevention and control

procedures are verified on regular basis so as to be able to map any residual risk.

The Bank has maintained a database of all internal operating losses and key risk indicators. These common

databases are used to analyze losses (by event types, cause, activity, etc) and monitor their evolution as well as

the proposed corrective action plans.

v. Compliance and Regulatory Risk

To comply with Bank of Ghana‟s directives and international best practice and standards, the Bank established a

compliance unit in 2008. Specific policies and procedural manuals have been developed to guard against the

risk of non-compliance. Preservation of the Bank‟s interest against anti-money laundering was reinforced and

money laundering monitoring tools was deployed to trace large value transactions to help curb the activities of

money launderers. In order to strengthen the Bank‟s effort against money laundering and terrorism financing,

employees at the head office and branches received dedicated training on anti-money laundering and counter

terrorism financing issues and reporting.

vi. Legal Risk

The Bank is not dependent on any patent or any industrial, commercial or financial contract. Risks arising out of

material litigation matters initiated or likely to be initiated against the Bank are subject to quarterly review. In this

regard, the Operational Risk and the Legal Departments draw up a report every quarter setting forth these

litigations and assess the potential loss if any. These reports are referred to the Board‟s Risk Committees which

give grounded advice on the basis of which Executive Management decides on the reserves amount or its

reversal.



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Vii. Reputational Risk

The Bank conducts its business in a responsible, professional and transparent way. By offering simplified

products and following the necessary legal and regulatory processes, the Bank safeguards the interest of its

customers as well as its reputation. Furthermore, the Bank maintains close ties with the communities in which it

operates by supporting them in various ways. This is aimed at demonstrating our commitment and fostering a

long term relationship with our customers and the public at large. We manage our image and reputation in a

professional manner.

viii. Capital Management

The primary objectives of the Bank‟s capital management are to ensure that the Bank complies with externally

imposed capital requirement by the Bank of Ghana and that the Bank maintains strong credit ratings and healthy

capital ratios in order to support its business and maximize shareholders‟ value. The Bank manages its capital

structure and makes adjustment to it in the light of changes in the economic conditions, business activities and

the risk profiles. In order to maintain the desired level of capital, the Bank may vary its dividend policy or issue

new shares. The Bank complied with all externally imposed capital requirement throughout the period.

ix. Regulatory Disclosure

2016

2015

Loan Classification by Status

Gross Loans per BOG Classification

3,051,999,471

2,539,301,580

Performing Loans

2,889,005,732

2,487,741,760

Non-Performing Loans

162,993,739

51,559,820

NPL (%)

5.34%

2.03%

Capital Adequacy Ratio (CAR)

12.64%

10.25%

Loan Loss Provision ratio

0.061:1

0.031:1

Liquidity ratio 32%

20%

Ratio of 50 Largest (funded and non-funded) to exposures (funded and non-funded)

0.70:1

0.54:1



65

27. Corporate Social Responsibility Cost An amount of GHS 6,937,981(2015: GHS 7,403,064) was spent under the Bank‟s social responsibility program.

28. Segmental Reporting

Segmental information is presented in respect of the Bank‟s business segments. The Bank is organized into

three main business segments: Corporate, SME and Consumer.

Some of the Bank‟s corporate costs are managed centrally and standardized basis are used to allocate these

costs to the business segments on a reasonable basis.


CORPORATE SME CONSUMER OTHERS TOTAL

GHS GHS GHS GHS GHS

Interest Income

775,785,469

295,138,014

32,521,160

244,438,781 1,347,883,423

Interest Expense

(450,988,682)

(112,593,033)

(18,057,624)

(463,114,955)

(1,044,754,294)

Net Interest Income

324,796,787 182,544,981 14,463,535

(218,676,173) 303,129,129

Non-Funded Income

32,702,013

13,226,196

1,106,752

42,761,389 89,796,350

Operating Income

357,498,799 195,771,176 15,570,287 -175,914,784 392,925,479

Operating Expenses

(75,717,165)

(17,832,357)

(2,259,888)

(157,179,803)

(252,989,213)

Impairment on loans &advances

(71,604,994)

(8,000,805)

(641,771) -

(80,247,571)

Profit before tax

210,176,640 169,938,014 12,668,627

(333,094,587) 59,688,694

Taxation

(9,581,749)

(7,554,225)

(577,550)

-

(17,713,524)

Profit after tax

200,594,891 162,383,789 12,091,077

(333,094,587) 41,975,170

Cost to Income Ratio (%)

21.18% 9.11% 14.51% -89.35% 64.39%

Net Interest Margin (%)

14.94% 25.10% 24.79% -11.52% 10.07%

Credit Loss Ratio (%)

-3.29% -1.10% -1.10% 0.00% -2.67%

Total Assets

4,166,857,753

1,367,373,387

109,681,600

93,691,059

5,737,603,799

Total Liabilities

3,828,205,546

1,256,243,120

100,767,469

86,076,524

5,271,292,659

Other Segment Items:

Depreciation & Amortization

-

-

-

16,238,648

16,238,648

Capital Expenditure

-

-

-

35,671,536

35,671,536

Loans

2,173,729,558

727,345,944

58,342,855

49,837,018

3,009,255,375



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Segment Revenue reported above represent revenue generated from external customers. There was no intersegment revenue in the current year (2015: Nil) The accounting policies of the reportable segments are the same as the Bank.


CORPORATE SME CONSUMER OTHERS Total

GHS GHS GHS GHS GHS

Interest Income

359,518,514 103,349,691 10,573,162 159,358,634 632,800,001

Interest Expense

(256,644,780)

(49,107,997)

(6,721,961)

(183,473,147)

(495,947,885)

Net Interest Income

102,873,734 54,241,694 3,851,201 (24,114,513) 136,852,116

Non-Funded Income

37,673,290 12,547,144 410,071 71,487,838 122,118,343

Operating Income

140,547,024 66,788,838 4,261,272 47,373,325 258,970,459

Operating Expenses

(55,991,727)

(13,186,765)

(1,671,154)

(116,112,126)

(186,961,772)

Impairment on loans & advances

(17,022,598)

(3,504,609)

(154,970) -

(20,682,177)

Profit before tax

67,532,699 50,097,464 2,435,148

(68,738,801) 51,326,510

Taxation

(5,885,004)

(6,191,889)

(265,738) -

(12,342,631)

Profit after tax

61,647,695 43,905,575 2,169,410

(68,738,801) 38,983,879

Cost to Income Ratio (%)

39.8% 19.7% 39.2% 247.5% 72.3%

Net Interest Margin (%)

3.3% 10.5% 4.3% -22.2% 3.5%

Credit Loss Ratio (%)

-0.8% -1.6% -0.5% 0.0% -0.9%

Total Assets

3,237,282,559 444,714,017 67,541,769 81,394,121 3,830,932,466

Total Liabilities

2,982,886,100 409,966,219 62,264,383 75,034,379 3,530,151,081

Other Segment Items:

Depreciation & Amortization

- -

- 10,371,964 10,371,964

Capital Expenditure

- - - 36,970,362 36,970,362

Loans

2,124,807,915 295,041,592 44,809,991 54,000,212 2,518,659,710

No single customer contributed 10% or more to the Banks revenue for both 2016 and 2015.



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29. Financial Instruments Classification Summary

Financial instruments are classified along four recognition principles: held at fair value through profit or loss

(comprising trading and designated), available-for-sale, held-to-maturity and loans and receivables. These

categories of financial instruments have been combined for presentation on the face of the statement of financial

position.

The Bank‟s classification of its principal financial assets and liabilities are summarized below:

Total

Held to maturity Loans & Receivable Carying Fair

at amortized cost at amortized cost Amount Value

Notes GHS GHS GHS GHS

Financial Assets

Cash and cash equivalent 10 - 1,503,415,970 1,503,415,970 1,503,415,970

Trading assets (pledged &non-pledged) 11 949,679,021 - 949,679,021 949,679,021

Loans and Advances 12 - 2,885,538,777 2,885,538,777 2,885,538,777

Other Assets 13 - 229,313,512 229,313,512 229,313,512

Total at 31/12/16 949,679,021 4,618,268,259 5,567,947,280 5,567,947,280

Cash and cash equivalent 10 - 661,408,248 661,408,248 661,408,248

Trading assets (pledged &non-pledged) 11 386,824,156 - 386,824,156 386,824,156

Loans and Advances 12 - 2,475,190,684 2,475,190,684 2,475,190,684

Other Assets 13 - 151,497,508 151,497,508 151,497,508

Total at 31/12/15 386,824,156 3,288,096,440 3,674,920,596 3,674,920,596

Liabilities

Measured at Total

Amortized Carrying Fair

Cost Amount Value

Notes GHS GHS GHS

Financial Liabilities

Deposit from customers 15 2,615,879,033 2,615,879,033 2,615,879,033

Borrowings 16 2,394,179,397 2,394,179,397 2,394,179,397

Other Liabilities 17 246,484,824 246,484,824 246,484,824

Total at 31/12/16 5,256,543,254 5,256,543,254 5,256,543,254

Deposit from customers 15 2,728,142,189 2,728,142,189 2,728,142,189

Borrowings 16 660,519,775 660,519,775 660,519,775

Other Liabilities 17 136,532,247 136,532,247 136,532,247

Total at 31/12/15 3,525,194,211 3,525,194,211 3,525,194,211



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30. Value Added Statements for the year ended 31 December 2016

2016 2015

GHS GHS

Interest earned and other operating income 1,437,679,277 754,918,343

Direct cost of Services (1,214,716,677) (623,136,304)

Value added by banking services 222,962,600 131,782,039

Non-banking Income 495 -

Impairments (80,247,571) (20,682,177)

Value Added (80,247,076) (20,682,177)

Distributed as follows:

To Employees:-

Directors (without executives) (352,875) (411,225)

Executive directors (3,397,951) (2,789,836)

Other employees (63,037,357) (46,200,328)

To Government:

Income tax (17,713,524) (12,342,631)

To providers of capital:

Dividends to shareholders - -

Depreciation (16,238,647) (10,371,964)

Retained earnings 41,975,170 38,983,878

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