I am delighted to present to you the performance of Opportunity International Savings and Loans for the financial year ended 31st December 2016.
First and foremost I must allude to the fact that the business had its fair share of the unfavorable macro- economic pressures which was characterized by high levels of volatility in the area of exchange rate, interest rate and inflation thereby impacting on cost and the desired ability to generate revenue.
In spite of these challenges, I am pleased to inform you that the institution rose up to the occasion to deliver yet another sterling performance through the effective and efficient utilization of our human resources to implement our agreed strategies as well as the excellent management of our assets and liabilities.
During the period under review, the overall macro-economic outlook of the country did not show any clear sign that it was out of the woods. Though it was a bit modest compared to the last three years which was hit by slowdown in global growth due to lower global trade volumes, a near collapse in the international commodity market, and generally higher levels of risk aversion from International investors. The past year saw some marginal level of recovery due to significant tightening of monetary and fiscal policies.
In the final analysis, this led to some stability in the country’s economic conditions throughout the year which was evident in the improvement in the inflation rate to close the year at 15.4 percent down from 17.2 percent, monetary policy rate at 25.5 percent from 26 percent and a largely stable foreign exchange rates.
In the banking industry, total assets stood at GHS80.9 billion at the end of 2016 with 17.4 percent non-performing loans leading to a provision of about 8.4 percent as bad debts in their books.
Client deposits ended the year 2016 at GHS51.4 billion, growing by 26.8 percent with demand deposits (current and savings accounts) growing more than time or fixed deposits as at the end of the year according to the latest summary of Macroeconomic and Financial Stability report by the Bank of Ghana. While demand deposits grew by 22.4 percent, time deposits shot up by 15.5 percent.
Our institution delivered a strong financial performance in spite of intense competition and a tough operating environment. This is evidenced by a profit after tax of GH¢5.56 million compared to GH¢1.87 million in the previous year. Most of our business lines recorded growth, which is reflective of our calculated effort to create sustainable value and a focused implementation of our business strategy. The total asset base of the Company grew by 24% from GH¢155.31 million in 2015 to GH¢192.06 million in 2016.
Customer deposits grew by 26% to GHC124.70 million due to cognizant deposit mobilization effort during the period. We maintained a continuous focus on enhancing the quality of relationship management, credit monitoring and recoveries to effectively manage the quality of our loan book. That notwithstanding, specific and challenging advances were adequately provided for and recovery measures put in place. Our capital adequacy ratio remained relatively high at 14.85% arising out of our increased earnings in 2016. We will leverage on our strong capital position to sustain planned future growth of our business.
By keeping abreast with the new trend in banking to offer the best of products and services and convenient banking to delight our customers, we introduced a mobile solution dubbed ‘Opportunity Mobile’ to serve our customers. This effectively will enable customers do all basic transactions on their phones in the comfort of their homes and workplaces without coming to the banking halls. The rapid growth in mobile banking enrollment is likely to help the institution reach out to One Million customers by the end of 2020. This will surely impact positively on revenue, through enhanced efficiency and its consequent reduction in costs of serving clients and clients accessing us.
Staff productivity over the period was highly commendable, considering the fact that there was a deliberate action to reduce headcount, which did not affect the overall productivity as had been planned. Staff capacity development remained largely on course, with a number of staff being promoted into positions of higher responsibility, and into leadership, having gone through the mill over the past years. Our people strategy will continue to focus on attracting the best talents on the market and developing their capacities continually whilst ensuring a high rate of retention to facilitate the achievement of our set targets.
On behalf of the Management, I would like to appreciate our customers for their continued patronage of our products and services and to all stakeholders for your unwavering business relationships and support. Finally, I would like to thank our able employees for their continued loyalty to the Company.
I am positive that with your continued support, 2017 will be a successful year.
Thank you and God bless us all.