INNOVATING FOR A SUSTAINABLE FUTURE
Access Bank (Ghana) Plc 2017 Annual Report
Contents
01| Overview
Welcome 8 Business and Financial Highlights 9 Location and Offices 10 Chairman’s Statement 12 Managing Director’s Review 15
02| Business Review
Corporate Philosophy 21 Milestones 22 Our Year in Review 23 Commercial Banking 27 Retail Banking 29 Corporate Banking 33 Public Sector 34 Investment Banking 35 Digital Banking 36 Operations and I.T. 38 Service Quality 39 Our People, Culture and Diversity 42 03| Sustainability and 06| Shareholder Risk Management Information
Sustainability 50 Risk Management 54 Shareholder Engagement 142 Notice of Annual General Meeting 143 Proxy Form 145
04| Governance 07| Corporate Information The Board 60 Directors, Officers and Professional Advisors 64 Management Team 65 Branch Network 150 Directors’ Report 66 ATM Network 152 Independent Auditor’s Report 68 International Network 153 Directors’ Responsibilities 72 Authority of the Board 72 Board Effectiveness Review 73 Committees of the Board 74
05| Financials
Statement of Comprehensive Income 78 Statement of Financial Position 79 Statements of Changes in Equity 80 Statement of Cash Flows 82 Notes 83 Top 20 Shareholders 133 Other Financial Information 134 Value Added Statement 138
Access Bank (Ghana) Plc 2017 Annual Report 5 01 Overview
In this section, is an introduction to the report covering who we are, highlights of the financial results, the Chairman and MD’s reflections on the year and a snapshot of where and how we do business. Welcome 8 Business and Financial Highlights 9 Location and Offices 10 Chairman’s Statement 12 Managing Director’s Review 15
Access Bank (Ghana) Plc 2017 Annual Report 7 Access Bank (Ghana) Plc 8 2017 Annual Report 2017 2016 GHS'000 GHS'000 % Change Revenue 466,351 487,852 -0.49% 58,597 69,070 -15.16% 29,599 41,949 -29.44% Shareholders’ funds 469,757 429,562 9.36% Capital expenditure (including intangible assets and other prepayments) 27,225 35,416 5.35% Total assets 3,199,809 2,679,839 19.40%
Earnings per share (GHS) 0.25 0.38 -34.04% Net assets per share (GHS) 3.98 3.64 9.25% Number of shares 118,093.134 118,093.134
2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
2014 2015 2016 2017 2014 2015 2016 2017 Access Bank (Ghana) Plc 2017 Annual Report 9 Locations and Offices
Access Bank Ghana is ranked as the Our Nationwide Network 12th largest Bank in Ghana by assets and is operating one of the largest branch networks in the country. Our Bank is today Greater Accra Region Central Region reputed for its strong bias for excellent • Abeka Lapaz Kasoa (2) service delivery and comprehensive range • Accra Newtown of financial product offerings. • Achimota Ashanti Region • Adjiringanor Adum With our expert knowledge in Trade Finance, Treasury and Digital banking services, we • Alajo Alabar have built the capacity to help customers • Ashaiman Kejetia reach their full potentials. Today, we are • Castle Road KNUST strengthening our wholesale banking business and putting the power of banking in • Darkuman New Amakom the hands of thousands across the country. • East Cantonments Suame • Ghana Airport We service customers across five (5) Cargo Centre (GACC) Western Region business segments: • Haatso Enchi Branch • Corporate Banking • Iris Sefwi Wiawso • Investment Banking • Kaneshie Main Takoradi (2) • Commercial Banking • Kaneshie Post Office • Retail Banking • Kantamanto Eastern Region • Public Sector • Lashibi Koforidua (2) • Legon Tarkwa Branch • Madina • Nima (2) Volta Region • North Industrial Area Ho Branch • Octagon • Odorkor Upper East Region • Okaishie Bolgatanga Branch • Osu Oxford Street • Osu Watson House Upper West Region • Ring Road Central Wa Branch • South Industrial Area (SIA) • Spintex Road Northern Region • Tema Community 1 Tamale Branch • Tema Industrial Area (TIA) • Tema Main Brong Ahafo Region • UPSA Techiman Branch
Access Bank (Ghana) Plc 10 2017 Annual Report Our International Network Our Bank is a member of the Access Bank Group, which has a presence within West and East Africa and the United Kingdom. The Bank also has business offices in the Republic of China, Lebanon and the United Arab Emirates.
United Kingdom Lebanon
China
United Gambia Arab Emirates
Sierra Leone India
Ghana
Rwanda
Nigeria Democratic Republic of Congo
Zambia
Access Bank (Ghana) Plc 2017 Annual Report 11 Chairman’s Statement
We delivered sustainable growth in most of our core market segments in line with our strategic growth plan, despite the challenges we faced and the legacy issues we resolved.
Frank W. K. Beecham III Chairman
Our Operating Environment Ghana’s economy enjoyed relative stability in the past year. In particular, the country experienced a rebound in the oil Esteemed Members of Access Bank (Ghana) Plc, sector, partly due to favourable prices and oil production from new fields such as Sankofa. This accounted majorly for It is an honour to welcome you to the 10th Annual General the sharp increase in the country’s GDP from 3.5% in 2016 Meeting of your Bank and incidentally, its second as a publicly to 8.5% in 2017. It is worthy to note that the sectorial growth traded company. At this meeting, it will be my privilege to for industry spiked to 17% from negative 1.2% in 2016 as a present the Audited Accounts of your Bank for the year ended result of increased economic activity spearheaded by the 31st December 2017. government’s industrialisation agenda such as the One District, One Factory initiative. 2017 was a challenging year for the Ghanaian banking industry in general and for us at Access Bank (Ghana) Plc. But it was also Improvement in the general macro-economic environment a year in which we demonstrated our resilience in the market has seen inflation and interest rates trending downwards. and changed much for the better. The past year was also characterised by a relatively stable Ghana Cedi as compared to the previous year; and to other On behalf of the Board of Directors, Management and Staff, currencies in the West African subregion. Between January I would like to report that your Bank managed to stay its and December 2017, the depreciation of the Ghana Cedi was course, while maintaining its focus of re-aligning its business 4.45% compared to 9.2% during the same period in 2016. to the industry demands. We believe that we are now better positioned to capture any growth and business opportunities Our Industry whenever they arise. The banking industry was most probably one of the hardest hit within the services sector during the past year. Though asset quality remained a critical area of concern, the industry as a whole continued to be liquid and profitable.
Access Bank (Ghana) Plc 12 2017 Annual Report • The first half of 2017 witnessed a slowdown in private • The Bank was awarded and recognised with a number of sector activity as it coincided with the immediate post- prestigious national and international awards throughout election period. Though this had an adverse impact on the year. Some of these include: banks during the period, the 2nd half of the year saw private sector activity pick up with a modest rebound. - Citibank Straight Through Processing Award; - Best Financial Services Provider, Ghana • The past year witnessed a capitalisation drive by banks in Manufacturing Awards the industry with the imminent deadline of 31st December - Highest Engagement Award for Women, 2018 to recapitalise to a minimum of GHS 400 million. The Global Banking Alliance Awards; and industry is likely to see significant consolidation in the form - Most Influential Bank on Social Media, Ghana Social of mergers and acquisitions as banks take steps to meet Media Rankings. the new minimum paid-up capital. Our Performance • Introduction of new policies and directives such as the We delivered sustainable growth in most of our core market Treasury Single Account which led to the closure of segments in line with our strategic growth plan, despite the several government accounts had an impact on liquidity in challenges we faced and the legacy issues we resolved. The the industry. non-resolution of energy related debts especially with respect • Tighter regulation by the Central Bank and the issuance to the Bulk Distribution Companies for instance, impacted on of new guidelines to improve the operations of Banks was our liquidity for investments. evident. The implementation of the Banks and Specialised As such, we recorded a drop in our profits by 15% to GHS 58 Deposit-Taking Institutions Act, 2016 (Act 930) and the million after making significant provisions to ensure a healthy Ghana Deposit Protection Act, 2016 (Act 931) should loan book. Despite this, our results show the resilience of your improve the overall stability and soundness of the financial Bank in an environment which continues to be characterised sector. by stiff competition, changing regulatory landscape, weak consumer demand and market volatility. Achieving Sustainable Growth Sustainability has continued to be an integral part of Access Total Assets grew by 19.4%, rising from GHS 2.679 billion Bank’s identity for a long time – it is embedded in our DNA. For in 2016 to GHS 3.199 billion in 2017, while Customers’ us to be successful and create the needed shareholder value Deposits increased by 6% from GHS 2.01 billion in 2016 to over the long term, we are today striking a balance between GHS 2.131 billion in 2017. We however witnessed a decline in economic, social and environmental aspects in all our decision- Gross Earnings of 0.5% from GHS 487million in 2016 to GHS making processes to protect and enhance shareholder value. 485 million in 2017 and Net Loans and Advances dropped significantly by 31% from GHS 1.29billion in 2016 to GHS • A solid capital base is essential if we are to succeed in our 878million in 2017. future strategy and capture growth opportunities for Access Bank. For that reason, we are embarking on the Dividends 2nd phase of our capital raising exercise by raising an In view of the Bank’s performance over the course of 2017 and additional Ghs450 million in bonds and rights issue. We are the fact that your Bank will be coming back to shareholders this confident of concluding this process ahead of the deadline. year for additional investments to shore up its capital position • Our Bank has once again demonstrated its leadership to meet the new minimum paid-up capital requirement by in the area of transparency and disclosures by committing December 2018, it will not be prudent to pay dividends to to issue a sustainability report following the world shareholders this year. acclaimed Global Reporting Initiative (GRI) sustainability This is to fulfil our potential in delivering returns to shareholders reporting standards. The initiative will enable our by maintaining sufficient levels of capital reserves to deliver a shareholders and customers assess our non-financial solid balance sheet for increased business opportunities and performance. sustainable shareholder returns.
Access Bank (Ghana) Plc 2017 Annual Report 13 Investing in Society Appreciation Your Bank aims to have a positive impact in people’s lives, We would not be where we are today without the consistent, now and for generations to come. To achieve this, we will unwavering support of our several stakeholders. The Board, continue our corporate citizenship efforts in the areas where Management and Staff highly appreciate the support of our we believe we can have the most impact: the UN Sustainable over 1,800 shareholders. Your support has allowed the Bank Development Goals (SDGs). Since 2015, we have aligned to continue making critical investments to ensure sustained most of our community interventions to the SDGs, the growth. recent being Maternal Health under Goal number 3 – Good Health & Well-being. We also remain highly appreciative of our customers, business partners and the regulators, who continue to provide Our interventions under Maternal Health in the past year invaluable support. On behalf of the Board, I also wish to has been supported by over 1,200 employee volunteers. We thank all staff members of Access Bank (Ghana) Plc for their have also used the Maternal Health Scheme under our award extraordinary team work, energy and dedication, in making winning “W” initiative, to empower women by giving them 2017 a progressive year, despite the considerable challenges access to quality healthcare across the country. that it presented. Finally, please permit me to thank my colleague Directors for their camaraderie, contributions, 2018 Onwards commitment and passion for service to the Bank. 2018 marks the continuation of our journey and will take us to our next destination of becoming one of the leading retail banks in Ghana. This will be the year to redefine our mark as a Esteemed Members, your truly sustainable bank as we commence the implementation Bank has a solid foundation of our next 5-Year Corporate Strategy (2018 – 2022). and I am very optimistic about its future. Going into the future, the Board is poised for growth and is focused on sustaining resilience by enhancing reputation God bless Ghana and performance. We will further develop our strategy to deliver value to all of our stakeholders within a governance God bless Access Bank (Ghana) Plc framework that provides stability, prudence and effective oversight. As a well-diversified Bank underpinned by Thank you. historically stable revenue generation and significant capital strength, our Bank is well equipped to manage anticipated Frank W. K. Beecham III risks and uncertainties in the market. Chairman
Access Bank (Ghana) Plc 14 2017 Annual Report Managing Director’s Review
We are continuously investing in change and innovation, with the goal of improving our customer experience, lowering our costs and reshaping our business for the long term.
Dolapo Ogundimu Managing Director
2017 was an eventful and important year for our Bank. It was Within the Bank, the paperless drive was also reinforced a year in which we took considerable steps to further build a with the full implementation of an Enterprise Resource sustainable business for the future. Strict capital discipline, Management System (ERMS) ensuring that the Bank’s support substantial cost efficiencies and our integrated business processes are transacted through a paperless medium to model helped support our growth during another challenging reduce transaction turnaround time for the end-customer and year for our Bank. also allow internal approval processes electronically. Today, we are processing transactions more speedily than ever before. I am pleased to report that most of our businesses made steady progress in delivering on their strategic targets during Strengthening our Business the past year. During the past year, we have also strengthened our resolve to run a more efficient Bank by maximising available resources Innovating our Business and encouraging the use of digital platforms by our customers. In today’s operating environment, adhering to the status quo Today, we are serving thousands of our customers through is no longer an option. As such, we are continuously investing our e-banking platforms such as USSD *901#, Mobile app in change and innovation, with the goal of improving our and Online banking. By the end of 2017, subscriptions across customer experience, lowering our costs and reshaping our these products had exceeded 100,000. business for the long term. In line with our retail focus, we also combined our personal and In the year under review, we deployed several service business banking groups into our new divisional retail banking enhancement initiatives to improve the banking experience. segment. The combination of both groups was to allow for a The introduction of our “Slip free” and “Instant Card” banking lot more synergy between cross functional teams within the services were crucial in delivering value to our teeming division to effectively support Individual and SME business customers. The initiatives led to reduced waiting times for growth. card requests and further underscored our paperless banking drive.
Access Bank (Ghana) Plc 2017 Annual Report 15 As we have done consistently over the years, our Bank However, we witnessed a significant drop in our profits and continued to spread its footprints across the country to take other performance indicators largely due to the incidence advantage of what will accrue from the scale and status of a of legacy debts, reduction in interest yields and low levels of large retail bank. These investments are paying off today as economic activities in the real sector. we serve our teeming customers across 52 locations in all ten regions of Ghana. I am confident that given the solid foundation our Bank has built for the future, we can expect to bounce back in the In the past year, we also stepped up our financial inclusion coming year and beyond to deliver sustained growth across all initiatives to achieve the desired impact of widening the parameters. bankable population in Ghana. Initiatives such as the Female Leadership Journey, which was in partnership with the I would like to thank our customers for their continued loyalty Dutch Development Bank (FMO) for women empowerment, towards our products and services, our regulators, partners, continues to yield impressive results. The programme brought shareholders and other stakeholders for their long-term together female leaders in finance from across the world relationships, support and investments especially in these to work alongside customers and staff of the Bank to drive times of change and growth. impact in gender finance. I am also proud to be working alongside our over 1,200 Reshaping our business colleagues who are dedicated to working in a professional way, striving to deliver excellence in all we do. As part of reshaping our business for the long haul, the Bank completed its 5-year strategic plan to support the next phase of its growth from 2018 to 2022. We have crafted a strategy with an unrelenting and ambitious goal of becoming one of Our long-term vision to the leading retail banks in Ghana by 2022. Though audacious, become the World’s Most I have every reason to remain confident that this will be Respected African Bank achieved given our financial and human resources. remains unchanged and, with God on our side, we shall achieve Despite the continuing difficulties within the year, we delivered this in the very near future. a healthy operating result, produced a higher value of new business and maintained robust liquidity and capital positions. God Bless
Dolapo Ogundimu Managing Director
Access Bank (Ghana) Plc 16 2017 Annual Report
02 Business Overview A brief review of Access Bank’s Financial and Operational Achievements in the past year. Corporate Philosophy 21 Milestones 22 Our Year in Review 23 Commercial Banking 27 Retail Banking 29 Corporate Banking 33 Public Sector 34 Investment Banking 35 Digital Banking 36 Operations and I.T. 38 Service Quality 39 Our People, Culture and Diversity 42
Access Bank (Ghana) Plc 2017 Annual Report 19 Access Bank (Ghana) Plc 20 2017 Annual Report Corporate Philosophy
VISION MISSION To set standards for sustainable To be the world’s most business practices that unleash the respected African Bank. talents of our employees, deliver superior value to customers and provide innovative solutions for the markets and communities we serve.
Our Core Values At Access Bank, our values play a vital role in our decision-making processes. Our culture is defined by a set of values and which gives us a unique identity and drives us to deliver on our promise to our customers and stakeholders.
Excellence Innovation Leadership urpa n or nar tan ar to e oneer n ne a o o n t n ea n e a ple an lea n t e e t n all t at e o ne pro u t an er e an ne t ut approa e to u to er ett n t e tan ar or at t • Being first, being the best and ean to e e ept onal • Being first, testing the waters and o et e e n t e onl pu n oun ar e ur approa not t at o e ellen e allen n t e tatu uo at all o t t e ellen e on all Ant pat n an re pon n u l ront o t at e el er out o e to ar et nee t t e r t t at are e ono all en ron entall te nolo pro u t an er e an o all re pon le to a e e u to er o e t e
Passion for Customers Professionalism Empowered Employees o n ore t an u t el er n utt n our e t oot or ar n a e on are alue an on e ellent u to er er e e er t n e o e pe all n e elop n our people to e o e pre ure tuat on elp n people to learl un er tan orl la pro e onal o our pro u t an er e or on tentl r n n t e e t o our n oura n a en e o o ner p at no le e an e pert e to t e ta le reat n u to er a rl u l n n ual le el l t o ter n tea n all our ntera t on t our lon ter relat on p a e on p r t an o t ent to a are ta e ol er tru t a rne an tran paren on ett n t e e t tan ar n our or et e a our a t t e an n t e a e treat our u to er an u t a portantl one anot er
Access Bank (Ghana) Plc 2017 Annual Report 21 Milestones