ttb annual report 2008

Annual Report And Financial Statements | 2008

01

Financial Highlights 02

Vision, Mission & Values 03

Corporate Information 04

Board of Directors and Executive Committee Members 05

Message from The Chairman 07

Message from The Managing Director 11

Summary Overview 2008 14

Significant Facts 17

Corporate Banking 20

Commercial & Consumer Banking 23

Institutional Banking 26

Retail Banking & Funds Transfer Services 29

Corporate Governance & Ethical Conduct 31

Report of the Directors 33

Report of the Independent Auditors 34

The Financial Statements

Income Statement 37

Balance Sheet 38

Cash Flow Statement 39

Notes to the Financial Statements 42-78

TTB Network (Branches) 79

Statement of Recognised Income and Expense 37

PassionateSolutions

THE TRUST BANKLIMITED

TABLE OF CONTENT


02

For the year (Cedi million)

2003 2004 2005 2006 2007 2008

Total Income 8.72 13.12 15.42 19.06 25.76 37.371 Net Operating profits 4.58 7.03 7.93 9.02 16.59 16.06

Profits before tax 3.59 5.95 6.79 7.80 10.47 13.13

Net Profits 1.94 3.71 4.53 5.61 8.01 9.56

At year ended (Ghana Cedi Million) 2003 2004 2005 2006 2007 2008

Shareholders’ Funds 4.73 7.15 10.09 13.74 21.75 29.40

Total Deposits 39.17 50.90 57.09 70.83 109.77 123.31

Total Assets 62.43 89.79 98.24 123.04 220.79 253.01

Rates (%) 2003 2004 2005 2006 2007 20082 Capital Adequacy 11.10% 12.61% 12.07% 13.28% 11.95% 11.75%

Cost to Income (Excl. Depreciation) 47.40% 43.80% 43.80% 49.92% 52.00% 53.00%

Return on average Equity 46.10% 62.50% 52.50% 47.05% 46.80% 38.96%

Per Ordinary Share (GH¢) 2003 2004 2005 2006 2007 2008

Dividend 0.09 0.13 0.16 0.20 0.20 -

Earnings 0.19 0.37 0.45 0.56 0.80 0.96

1 2Notes: Before Bad Debt Provision & Depreciation Required Minimum – 10%

PassionateSolutions


FINANCIAL HIGHLIGHTS


03

PassionateSolutions


OUR VISION

OUR MISSION

OUR VALUES

To be the leading financial service provider in our target markets.To provide flexible financial solutions tailored to our customers’ needs.To think globally, act locally combining the various strengths of our network partners & shareholders.

To grow, manage and protect customers’ business & financial assets.To serve the customer better and faster.To conduct business in an ethical & responsible manner.To create sustainable shareholder value.

To be reliable, today and tomorrow.To be listening & responsive.To be innovative & efficient.To be transparent & honest.


04

PassionateSolutions


Board of Directors:

Secretary:

Auditors:

Solicitors:

Registered Office:

Albert D. Osei (Chairman)

Isaac Owusu-Hemeng (Managing Director)

Thompson Kuduo Abu-Bakr Bibilazu

B. A. M. Zwinkels

W. O. Agbenyega

Michael Jacquemin

Kojo Okai Andah

Charles Obeng-lnkoom

Deloitte & Touche

Chartered Accountants

4 Liberation Road

P. O. Box GP 453

Accra

Bentsi-Enchill, Letsa & Ankomah

Legal Practitioners

1st Floor, West Wing

Teachers' Hall Annex 4

Barnes Close

P. O. Box 1632

Accra

Reinsurance House

68 Kwame Nkrumah Avenue

Adabraka

Accra

CORPORATE INFORMATION


05

PassionateSolutions


BOARD OF DIRECTORS

MEMBERS OF EXECUTIVE COMMITTEE

Albert D. OseiChairman

Ben A. M. Zwinkels Isaac Owusu-HemengMD/CEO

Thompson K. A. Abu Bakr-Bibilazu

William Agbenyega Kojo Okai Andah Michel Jacquemin Charles Obeng-InkoomCompany Secretary

Isaac Owusu-HemengMD / CEO

Larry Yirenkyi-BoafoDMD

Asare-Boakye YiadomGM, Risk Management

Nat AkainyahGM, Operations & Systems

Charles Obeng-InkoomCompany Seccretary

Albert D. OseiChairman

PassionateSolutions


MESSAGE FROM THE CHAIRMANIntroduction

The Ghanaian Economy

The World Economy

recession in the first place. But while this has

The year 2008 was the one in which your bank finally shallowed the depth of the global economic

took its deserved place at the pinnacle of Ghana’s recession, it has not prevented it from happening

banking industry. Your bank was voted Bank of The altogether.

Year by the banking public at the Ghana Banking

Awards. Your bank accordingly had to cope with both the

global credit crunch and the ensuing global recession

The domestic and international recognition of your during the year under review.

bank last year has been once again justified by its

performance. During 2008, prudent professional risk

management has resulted in your bank growing in For the year 2008, Ghana recorded a GPD growth rate

size, expanding its horizons and increasing its profits of 7.3%, up from 6.4% the previous year and the

to record levels. highest growth rate in nearly two decades. The

growth rate of 7.3% was mainly driven by the

considerable growth in the services sector, which

The year under review was one that was marked by grew by 9.3% and contributed a total of 31.81% to

the near collapse of the global financial industry’s total GDP.

architecture as the sub-prime mortgage lending crisis

of the previous year exploded into a full-blown This was, however, accompanied by widespread

systemic credit crunch and ultimately into a financial deterioration in the performance of the Ghanaian

crisis, the likes of which has never been seen in more economy. Traditionally, there are severe fiscal

than 50 years. slippages in every election year and 2008 was no

different. Added to the deepening global economic

To stem the collapse of major international financial recession, the toll on the economy was inevitable.

institutions, governments across Europe, the The fiscal deficit rose to 14.8%(excluding divestiture

Americas and Asia sought to prop them up through proceeds) last year, its highest level in a quarter of a

multi-billion dollar bail-out plans, which, in effect century and the public debt rose to an estimated 55%

have led to the part-nationalisation of many leading of Gross Domestic Product.

banks and insurance firms although others have been

left to go under. Similarly the external current account deficit also

reached a high of about 20% of GDP, with the

With global economic growth already on the decline, International Reserves position falling to just 1.8

a descent into recession was inevitable and indeed months of import cover for goods and services.

global economic growth halted in 2008. The waning

of confidence on the part of savers and investors has Inflation was propelled upwards by record high

created a veritable liquidity squeeze which has taken global crude oil and food prices during the first half of

its toll on liquidity in the international financial the year which fed into local consumer product

markets. prices. Rising inflation was sustained towards the end

of the year by sharply accelerated money supply

On the upside however, falling global demand led to growth, largely the result of rising demand for credit

a dramatic fall in international crude oil prices, which, by both the government and private enterprise. Year

when they peaked at US$147 a barrel in mid 2008, on year inflation stood at 18.13% by the end of 2008,

served as a major factor instigating the global drastically up from 12.7% a year earlier


07

resulted in increased domestic debt issuance at

This put severe upward pressure on local interest shorter maturities, as rising inflation has shortened

rates. Indeed the Bank of Ghana’s Monetary Policy investors’ horizons, raising roll-over risks. Currency

Committee increased its prime rate from 13.5% to translation losses have persuaded foreign investors to

17% during the year in an effort to stem these disinvest from the Ghana Stock Exchange and local

inflationary pressures. This in turn persuaded the investors have followed suit as equity prices fall in

universal banks to increase both their average base result, and conversely, yields on money market fixed

rate quotations and their average lending rates in interest instruments rise in consonance with inflation.

tandem.

However, the lessons of the global credit crunch with

Instructively, strong credit from both the public and regards to ill-advised lending, coupled with the

private sectors, accompanied by a deteriorating deteriorating economic environment for borrowers in

balance of payments position weakened the cedi, Ghana have combined to make Ghanaian banks more

considerably in 2008. During the year the cedi cautious about lending, despite still strong demand

depreciated faster against the major international for bank credit, as the associated credit risks increase.

trading currencies – the US dollar, the Euro, the

British Pound and the Japanese Yen – than at any The Bank of Ghana has adopted a risk-based

other time since the year 2000. approach to banking supervision and your bank is

adapting to this, with a view to ensuring that it

prudently assesses and handles the rising risk levels

The environment in which your bank operates grew involved in our core business.

increasingly competitive and more difficult last year.

Two new universal banks opened their doors to the Another challenge that now confronts your bank is

public in 2008, bringing the total number to 25, that of meeting the first new minimum capital level set

nearly twice the number as at the beginning of the by the Bank of Ghana of GH¢25 million by the end of

decade. Yet another one was given a provisional 2010 and the ultimate one of GH¢60 million before

licence last year and is expected to commence the end of 2012.

operations shortly. Even more banking licence

applications are currently being considered by the Our merger with Merchant Bank Ghana which has

Bank of Ghana. the same majority shareholder – Social Security and

National Insurance Trust – will be consummated this

While Ghana’s banks have not been adversely year and this will go a long way towards ensuring that

affected directly by the global credit crunch, there are we meet the new minimum capital requirement, but

some dire indirect effects. Trade credit lines are no will also position us as a truly universal bank.

longer growing which means more and more

importers either finance their own imports with cash The merger of an erstwhile commercial bank (as was

upfront or their bankers have to finance them with the case of TTB) and an erstwhile merchant bank will

trade loans. Foreign credit lines for onward lending create a financial institution that can properly exploit

to local enterprises are also in jeopardy. the vast opportunities created through both widening

the combined product range and also, deepening our

A bigger impact however is being felt from the global ability to take advantage of larger opportunities.

economic recession itself and its effect on the Importantly it will greatly enhance our capabilities in

Ghanaian economy. Higher fiscal deficits have earning fee-based income as fund-based activities

The Operating Environment

PassionateSolutions



08

PassionateSolutions


Isaac Owusu-HemengManaging Director

Introduction

Economic Environment

Competitive Environment

Overview Of TTB Performance In 2008

Fiscal deficit spending and the cedi depreciation

It is my pleasure to present the annual results of The contributed to a surge in inflation which rose sharply

Trust Bank (TTB) for the 2008 financial year. Once from 12.2% at the beginning of the 2008 to 18.13%

again, the bank has maintained its steady growth by the end of the year. The Bank of Ghana, through its

trend by posting impressive results, notwithstanding Monetary Policy Committee (MPC) responded to the

the challenges faced by the economy as a result of the rising inflationary pressures through several upward

upsurge in world crude oil and food prices for most adjustments in its Prime Rate, which was increased

part of the year under review from 13.5% at the beginning of 2008 to 17% as at the

end of the year. Both lending and deposit rates

increased in consonance. Importantly, the yield curve

In 2008, the Ghanaian economy came under intense on long dated securities is gradually getting inverted

pressure from deteriorating economic circumstances with 91 day treasury bills and 182 day securities

on both the global and local fronts. The global credit offering higher rates than medium-term instruments,

crunch assumed an alarming proportion ushering in leading investors to shorten their investment

an economic recession in the developed world. horizons.

Though the immediate impact to developing

countries like Ghana is yet to be fully felt, the macro-

economic indicators at the close of the year were not The Ghanaian banking industry saw a much

very favourable. intensified form of competition last year, as the

hitherto new banks literally gained their feet and

These problems were exacerbated by fiscal slippages, deepened their operations on all fronts. There were 2

a worsened external current account and budget additional banks, with the entry of BSIC and Bank of

deficits, with adverse consequence on the cedi Baroda during the year, bringing the total number of

exchange value and rising inflation. The overall fiscal players to 25. The combined effect of these factors

deficit hit a high of 14.8% (or 11.5%, including was a very keen kind of competition that was new to

divestiture proceeds) of Gross Domestic Product in the industry as the demand for cutting-edge

2008 and the current account deficit was even higher technology and quality human resources for

at about 20% of GDP, the latter fuelled by a widening providing the desired banking solutions increased

trade deficit and dwindling inward remittances. tremendously. At the other extreme end was

customer sophistication, which became progressively

These trends, in turn, put pressure on both the cedi more evident as customers began setting the grand

and on gross international reserves. As a result of rules of the game by being more demanding than

these negative factors, the cedi experienced its ever, and also being selective in their choice of

sharpest depreciation since 2001, falling by 20.1% products and services. The above notwithstanding,

against the US dollar, 16.3% against the euro and TTB stayed focused and met both challenges by

8.1% against the pound sterling. intensifying its Customer Relationship Management

(CRM) practices and also improving its Customer

Gross international reserves went down sharply by Service and Care initiatives. These indeed, propelled

the close of the year - down from 3.1 months import the bank to exceeding its targets for the year under

cover at the end of 2007 to 1.8 months of import cover review.

by the end of 2008.

Against the backdrop of the above local and global

PassionateSolutions


MESSAGE FROM THE MANAGING DIRECTOR


11

challenges, I am happy to report that the Bank infrastructure, a cost-conscious mindset and a

achieved significant growth in income and profits and performance-based culture underpinned by a reward

a commendable expansion in the size of its balance system to ensure attraction and retention of best

sheet. talents

For the 2008 financial year, the bank’s total income

grew by 45% to reach GH¢37.37 million. As you

might have expected, the intense levels of The bank was voted Bank of the Year 2007 at the

competition within the industry, coupled with our Ghana Banking Awards organized by Corporate

own strategic drive to selectively expand our delivery Initiative Ghana in May 2008. At that prestigious

channels and also widen the range of products and annual award ceremony, the bank was also voted

services on offer to our esteemed customers put Best Bank in Corporate Banking, First Runner-up in

pressure on our operating expenses which rose by Long Term Loan Financing, Short Term Loan

47.4% to GH¢19.58 million in 2008. As a bank that Financing and Product Innovation, and was again

focuses principally on SME financing, it was not voted Second Runner-up in Competitive Pricing.

unexpected that in periods of harsh economic

circumstances, the loan book should experience Also, in 2008, just as in the previous year, TTB was

greater impairment. However, as a result of prudent nominated among the top three banks in Ghana at the

lending and robust risk management practices, the Chartered Institute of Marketing Ghana’s prestigious

loan loss provisions were contained within annual awards.

acceptable norm.

Towards the end of the year, TTB again was conferred

Thus, we ended the year with an impressive pre-tax with the EMEAFINANCE Award for Best Bank in

profit of GH¢13.13 million, up by 25.45% over the Ghana 2008 by the authoritative London-based

previous year’s. However, after making a substantial finance magazine which covers Europe, Middle East

provision for income tax expense the net after –tax and Africa /.

profit was up by19.4% increase, from GH¢8 million

in 2007 to GH¢9.56 million in 2008. It is of interest to note that TTB is rated number one in

the banking sector and 12th overall in the Ghana Club

The bank experienced a significant growth in 2008, 100 rankings, which is the elite grouping of the

with total assets up 14.6% to reach GH¢253million country’s top 100 leading companies ranked annually

propelled by a 50.3% increase in loans and advances, by Ghana Investment Promotion Centre

which stood at GH¢161.9 million by the end of 2008.

Shareholders’ funds also experienced strong growth

of 35.2% in 2008 to reach GH¢29.4 million. TTB has an on-going corporate policy which guides its

donations and sponsorship programmes with a view

TTB’s financial performance for 2008 evidenced the to maximizing the social benefits. The policy

bank’s strong resilience to shocks from both domestic currently emphasizes providing interventions

and external fronts which in turn reflects management primarily in the areas of education and health, these

successes in pursuing its key strategic thrusts, namely, being key to improving living standards within local

achieving excellent customer service at profitable communities. This, the bank has done

levels, sound risk environment, cost efficient conscientiously and with unwavering commitment

operations by leveraging on the bank’s ICT systems & over the past few years, by donating in cash and kind

Brand Recognition And Marketing Achievements

Corporate Social Responsibility

PassionateSolutions



12

to beneficiary institutions and organizations. the total outlets to 17 and this will be further increased

The bank disbursed GH¢40,000 to various organiza- to 20 by midyear. We are currently in discussions

tions and institutions in 2004, GH¢47,000 in 2005, with a number of technology/telecommunications

over GH¢70,000 in 2006 and GH¢129,443 in 2007. companies seeking collaborations to bring more

convenience to our customers by introducing new

Last year, TTB provided reading books and teaching electronic payment systems that will enable cell

aids worth a total of GH¢48,000 to twelve deprived phone users to shop, top-up phone units, transfer

public basic schools spread across the Greater Accra, funds to third parties and pay bills using their mobile

Ashanti and Central Regions. The bank also donated phones. For the year under review, TTB was able to

GH¢10,000 to the Maternity Ward of the Korle-Bu deploy the platform that allows customers to check

Teaching Hospital in Accra, GH¢5,000 to the Ghana their account balances and view last 4 debit or credit

Society for the Blind among other corporate transactions via SMS messages. That same platform

donations and sponsorships, which also summed up also makes it possible for customers to receive SMS

to about GH¢40,000. Total disbursements to needy prompts on any transactions that hit their accounts in

institutions for 2008, therefore, totaled some Real-Time.

GH¢103,000.

An area of priority for 2009 is human resource

development. The bank is acutely conscious of the

The prognosis is that the year 2009 may turn out to be fact that behind its outstanding performance are its

one of the most difficult and challenging periods in employees who serve as the product architects and

this decade, as the financial system will have to cope engineers as well as those who provide the delivery

with the combined effects of the global financial crisis channels to meet the current and future needs of our

with accompanying deep recession in advanced banking public. TTB therefore remains totally

economies, as well as the threat of macro-economic committed to ensuring that we secure and retain the

instability on the domestic front. There are also the best talents and give them the right motivation so as to

industry specific challenges created by intense ensure their retention.

competition from both bank and non-bank financial

institutions as the lines of demarcation between Going forward, TTB is gearing itself to meet the new

commercial banking and other types of financial minimum capitalization level set by the Central Bank

service delivery channels are completely broken by 2012 and the preferred strategic vehicle chosen is

down. To overcome these challenges, TTB is taking a by way of a merger with Merchant Bank Ghana.

number of strategic steps: Under an agreed road map with the transaction

advisors, the merger is expected to be consummated

One of our main strategies is to widen the bank’s by mid-year 2009, baring any unforeseen

geographical reach, through branch expansion. In developments

2008, the bank opened three new branches bringing

The Way Forward

PassionateSolutions



13

The World economy plunged into a major downturn be managed very well until the bail-out planned of

in the year 2008 in the face of the worst financial our donor partners yield results that emerging

shock in mature financial markets since the 1930s. As economies like that of Ghana can benefit from.

major advanced economies were in or close to

recession during the most part of the year 2008, the

global economy slowed substantially in 2008 and a The aim of the monetary policy of Ghana, at bringing

modest recovery is anticipated to begin only in the inflation down to a single-digit level and limiting

latter part of the year 2009. The pick-up is anticipated exchange rate volatility, has been put to the test in the

to be unusually gradual as it will be held back by current year. The MPC had to deal with external

continued financial markets de-leveraging. Although pressures of the volatility of crude oil prices, global

developing economies did not have to deal with the inflation and its impact on imported goods and

level of financial turmoil faced by advanced nations, internal pressures from increased government

economic activities still slowed down and in many expenditure and domestic borrowing. These, among

cases to rates well below trend. Economies like that of others have caused the surge in inflation which rose

Ghana were faced with significant inflationary from a 2007 low of 10.14% in October 2007 to end

pressures even with more stable and in some cases the year (December 2007) at 12.75%. In the year

rising commodity prices. The lingering effects of the 2008 however, it shot to a record high of 18.41% in

financial market crisis on Ghana and other emerging June 2008, the worst performance since the year

economies has been among others, loss of confidence 2005, after which inflation fell steadily to 17.30% at

in counterparty trading, sharp fluctuations in the end of the period October 2008, when it began to

exchange rates, large depreciation of currencies, and take a rise to end the year 2008 at 18.13%.

reversal of capital flows and diminished investor Throughout the year 2008, the level of inflation for

funding (contributing to liquidity crunch within the non-food group was predo-minantly higher than the

Ghanaian financial sector). As the biggest challenge food group.

confronting this new Government is to get the

economy back on track, it will be against the

backdrop of reduced funding from Ghana’s major The performance of the cedi against the US dollar

donors and the fulfilment of campaign promises of the especially in the year 2008 recorded its worst rate of

reduction of fuel prices and the improvement of the depreciation in eight years. At the end of the year it

general living standards of Ghanaians. Although the had fallen by 25.7% which compares unfavourable to

world price of crude has dropped below $40 per the performance the same period in previous year of

barrel, the gains expected form the fall in prices are 3.9%. Not too long ago the Cedi was considered safe

being threatened by the corresponding downward to hold as a store of value and therefore a good

slide of the Ghanaian Cedi against the US dollar. Also instrument for investment. But since the last month of

Ghana’s ability to borrow against future oil receipts is year 2008, that high level of confidence has waned

being derailed by the current weakness in crude oil dramatically with people holding large stocks of the

prices and the current fiscal situation of donor Cedi converting it especially in favour of the US

countries restricting the availability of credit, the dollar. The situation is no different with the

Ghanaian economy may not enjoy any significant oil performance of the Cedi against the EURO as it

revenue in the short-term. Thus, a rather looming dropped by 20.3% at end of 2008(previous year

economic situation may be underway which needs to 16.2%). However, the cedi has appreciated against

Interest Rates & Inflation

Exchange Rate

SUMMARY OVERVIEWECONOMIC BACKGROUND AND MONETARY POLICY

PassionateSolutions



14

GBP at Dec’08 by 8.8% against a depreciation of income for the year increased by 46% from

9.15% for the same period in previous year which is a GH¢25.6million to GH¢37.4 million, and a

reflection of weakening of GBP on the international corresponding increase in operating expenses of 44%

front. accounted for the results booked in the year. This

performance was due to normal operating activities of

the bank and no capitals gains were made in the year

The Bank performed within its strategic frame work in 2008 as was the case in the previous year. By this

the year 2008 as it sought to achieve all targets set for performance, the Bank generated an annualised

the year. The year 2008 has been particularly return on average equity of 46% at the end of the year

challenging to the Banking Industry as most banks had 2008 which is about 1% less than the performance of

to deal with the trickledown effect of the Global previous year.

financial crisis and rising rates on domestic market.

The ever increasing demand for higher rates by

wholesale depositors coupled with the occasional With the current trend of rising rates coupled with

liquidity crunch on the money market were among customer sophistication, and the demands of higher

others, some of the challenges faced by TTB during returns on their deposits, Net Interest Margins (NIM)

the year. showed signs of shrinkage. Whereas interest income

grew over the year by 60%, interest expense surged

The Bank however continued to focus on its core by 108% in the same period as borrowing cost

competences as outlined in the current business plan continue to rise. However, an average NIM of

in order to curtail competitive pressures and achieve 10.84%was generated during the year which

the expected performance. The highlights of TTB’s favourably compares with the performance of 9.78%

strategic priorities carried out in the year are as of previous year. Increased volumes accounts for the

follows: performance booked in the year 2008.

Becoming a more market driven and

customer focused financial services provi- The Bank performed favourably in its non-funded

der rendering excellent Customer Services at incomes. Exchange gains made during the year on

Profitable income levels forex trading contributed significantly to

Continue to pursue the aggressive retail drive commissions earned for the period. The improved

to increase cheaper sources of funds exchange gains posted for the year was as a result of

To continue to improve on our Risk Manage- increased demand for foreign exchange coupled with

ment Systems. the depreciation of the cedi against major world

To fully utilize our Information and Techno- currencies. Commissions, fees and other income

logy platform. totalled GH¢13.37 million and this represented

To continue to pursue a “Cost Conscious” 35.79% of total operating income.

Mindset.

To reinforce a performance–based culture

Total operating expenses for the period increased by

44% to GH¢19.3 million. TTB was able to slightly

The Year 2008 posted an after tax profit of outperform the Cost to Income Ratio target of 54.95%

GH¢9.56million which represented a growth of 18% by achieving 52.67% at the end of the year 2008.

over the performance of previous year 2007. Total

2008 Performance

Net Interest Income

Commissions, Fee and Other Income

Operating Expenses

Profitability

PassionateSolutions



15

Balance Sheet Advances formed 67.9% of total balance sheet size

The balance sheet of the Bank expanded by 8% over which is higher than the achievement of previous year

the previous year. Growth in loans and advances of by 50%. The year recorded a 12% growth in deposits

51% over the previous year were as expected, whilst, other borrowings grew by 53%. Shareholders’

although during the last quarter of the year an funds of GH¢29.1 million which includes, Statutory

accelerated growth in Government bills was initiated and other Reserves have grown by 47% over the year;

to take advantage of the rising interest rates. The year this has been solely due to the net profit of the Bank

ended with a 12% growth in Bills. Total gross Loans & posted for the year 2008.

PassionateSolutions



16

A Board Member being assisted by Management and Customers to cut the BANK OF THE YEAR 2007 Cake.

Strategic Positioning: Moving Ahead Of The Competition

The bank’s corporate objectives for the period were

achieved through:

The year 2008 marked the second year for the

implementation of the bank’s second 3-year rolling Excellent customer service delivery through

plan, having successfully implemented the first phase effective segmentation:

(first third) in the previous year with exciting results.

The prime ambition of positioning the bank as a Quality service delivery has been the most potent

preferred specialist bank through the provision of weapon in the arsenals of TTB and we persistently

excellent quality customer service to customers, be build on this as a way of ensuring continuous service

they Individuals, identifiable Professionals or improvements to customers in our chosen markets.

Business entities was taken to new heights. We We do this by identifying existing market needs and

focused our energies and resources on further tailoring our products and services to meet these

deepening existing relationships with our core target needs at all times. In doing so, we always ensure that

markets and this further strengthened the position of the Service Delivery Value far exceeds the

the bank as a preferred SME bank. Great efforts and expectations of our customers and that is why

resources were therefore, put in training the right customer delight remains the cornerstone of our

calibre of staff to revitalise their selling and marketing business. It is this desire to delight customers that

skills to keep them ahead of the competition. It is no informed our decision to build our business along

wonder therefore that the bank has, once again, customer needs rather than geographical locations or

accurately and in sync with recent trends, met the product category and we achieved this through

expectations of stakeholders, the key being customers effective Market Segmentation, Market Targeting and

and shareholders in terms of value addition over the Brand Positioning aimed at catching the attention of

period. customers in both the Business-to-Consumer (B2C)

and Business-to-Business (B2B) markets.

SIGNIFICANT FACTS

PassionateSolutions



17

The bank maintained its number of commercial assisted our ability to introduce new electronic-based

divisions at 4, with each division still fashioned along products, improved our capacity for service delivery

homogeneous customer groups that is based on the and aided the provision of a sound risk management

existence of similarities in their banking needs. These environment.

divisions include: Corporate Banking, Institutional

Banking, Commercial & Consumer Banking and Improving performance and risk management

Retail Banking & Funds Transfer Services. systems:

Our desire to continue expanding the Retail and e- The bank’s upgraded credit delivery and credit risk

banking businesses was supported by an increase in management systems over the years enabled us to

the number of channels for the convenience of our continue to work at improving our capabilities in this

customers. These took the forms of physical branch direction in line with the Basel II accord. We have

presence as well as Technological products and strengthened our systems to build the desired

services, including ATMs, E-Zwich, Internet banking capacity for sound Integrated Management

(TTB Online), SMS banking etc. Information Systems to enable us meet the highest

regulatory compliance standards. This, we hope, will

Impact of our “lean operations” mindset: boost our risk management systems and eventually

result in reducing losses from errors, fraud, bad loans

Consistent with the above, the bank continued to etc in the coming years.

operate under a kind of flat organizational chart that

effectively eliminates unnecessary bureaucracy and Building a performance based culture among staff

ensures closer links between management and the and the risk/reward relationships:

rest of our staff for effective communications.

Management also intensified its resolve to inculcating The strengthening of our performance–based culture

cost-consciousness in all staff of the bank. This was among staff, underpinned by appropriate motiva-

achieved by educating staff to see the need for drastic tional packages and development programmes, with

reduction in waste and non-productive costs. We clear links also between actual performance and end-

progressed further the activity based management of-year compensation continued in earnest. We

methodology as a tool for enhancing performance continue to review our performance related reward

whilst controlling costs. schemes to keep them abreast with market trends and

also to further challenge staff to continue to improve

Building robust and performing system infra- their performance levels.

structures:

Management kept to its word of investing in the TTB formally signed onto the Western Union Money

training of staff to fully utilize the enhanced Transfer service from October 2003, and the business

functionalities of the new ICBA banking software so has registered tremendous growth ever since. The

as to improve the generation of fast, cost effective, bank currently operates from fifteen (15), out of its

reliable and efficient set of Integrated Management existing seventeen (17) own outlets in addition to its

Information Systems (IMIS) reports for enhanced six (6) accredited sub-agents. We have kept faith with

operational performance as well as accurate and all sub-agency institutions, namely Garden City

more reliable measures for tracking customer & staff Savings & Loans, First Allied Savings & Loans, Ezi

performances. The new applications software greatly Savings & Loans, Women’s World Banking Gh, HFC

Money Remittances Services

PassionateSolutions



18

Bank and Amalgamated Bank as well as individual continue to make substantial investments in training

beneficiaries of inward remittances services. To and manpower development. Twenty (20) staff

continue striving for service excellence, TTB has received overseas training during the year with 97

constantly instituted several forms of customer others going through a variety of local training

loyalty schemes to serve as incentives to ensure programmes. The bank also organised numerous in-

business growth and prosperity. The bank has also house training programmes for 244 staff under the

ensured constant and regular training programmes period. The year under review saw the bank organise

for its own staff and also staff of the sub-agency special training programmes on Customer Relationship

institutions for the purpose of building customer Management (CRM) for all Relationship Managers,

delight at the point of sale. Enhancing foreign Account Managers and Branch Managers. This was

exchange mobilisation to support the bank’s trade meant to give them the requisite skills for managing

finance business remains a prime objective of the existing customers in a way that ensures the

Retail Banking & Funds Transfer Division. minimisation of customer attrition rates whiles, at the

same time, prospecting for new clients.

It is our desire to continue to employ the services of

third party sub-agency institutions in addition to our The bank has, in a similar way, made it an annual ritual

own outlets to make it possible for many Ghanaians to contribute to the National Service Scheme (NSS) by

to enjoy the passionate service of TTB. engaging the services of 29 national service personnel

from 2004 to 2007 out of which 24 have been retained

as fulltime employees. Seventeen (17) personnel are

currently discharging their national service obligations

The bank continues to consider its human resource with the various departments of the bank for the

base as the most valuable asset. We therefore 2008/2009 service year.

Staff Training and Development: The Key to Our Business Success

PassionateSolutions



19

TTB E-zwich team signing on enthusiastic students during E-zwich mass registration exercise at Legon

Our chosen market is the corporate and medium Tesano

enterprises segment which is made up of the Tema and

following: Kumasi

We continue to enjoy uninterrupted and efficient

Multinationals / Internationals communication with all our branches through

Domestic Corporates and cutting-edge banking software. This has boosted our

Medium Enterprises e-banking capabilities and affords our clients the

ability to access and view their accounts in the

Efficiency, flexibility and empathy remain as our comfort of their offices.

brand. We passionately seek to delight our teeming

clients through personalized relationship using our

able business relationship managers at strategic We pride ourselves as having the following:

locations. We think through issues jointly with our Very knowledgeable, relatively young and

clients in order to arrive at solutions that best suit their motivated staff whose sole objective is to

purpose. delight our clients.

Strong trade finance products and services.

Strategic alliance with IFC to support trade

Our key objective is to build strong bonds with our and medium term finance financing.

customers and in the process we seek to thoroughly Relatively flat management structure which

understand their business. This enables us to facilitates quick credit decisions.

customize solutions to meet the specific needs of

each client. Our focus being the well being of our

business partners (clients), high quality customer In order to achieve a balance sheet size that’s

service delivery has been the cornerstone of our consistent with Bank of Ghana’s new bank

relationships. capitalization levels, thereby ensuring that we meet

the growing demands of our clientele, the bank

Despite the economic downturn largely witnessed in decided to go into a merger with Merchant Bank

2008 and the drying up of foreign inflows, we have Limited and we expect the deal to be concluded

remained focused in continuing to provide medium before the end of year 2009. This will strategically

to long term funds to core productive sectors of the position the merged entity to facilitate the financing of

Ghanaian economy namely; manufacturing, non- larger ticket deals and to venture into areas that we

traditional export businesses, agro-processing, trade have in the past shied away from in view of funding

finance, ICT, education and other related services. levels required. The bigger bank to be created will

also have a lot more branches to ensure easy reach of

a lot more customers. We will continue to expand our

In order to provide a more congenial atmosphere, we frontiers in the near future to areas where the merged

have moved the corporate banking department of the bank is not currently present. Thus, strategic branch

Bank to the NTHC building – Martco House just network expansion will be pursued vigorously to

behind the Head Office Building. To be within easy satisfy our growing clientele base.

reach of our increasingly growing client base we have

also set up corporate desks at the following branches:

Accra Main TTB continues to forge ahead through strategic

Post Office partnerships with major global financial institutions.

Our Strength

Our Strategy

Strategic Merger

Our Locations

Strategic Partnerships

CORPORATE BANKING

PassionateSolutions



20

With the active collaboration of the Dutch Finance Trade finance

Institution FMO and SIFEM, (Swiss Investment Funds Corporate governance

for Emerging Markets), we have since 1998, provided Financial management and

medium to long-term funds especially to the SME The e-zwich programme.

Sector.

In conjunction with the International Finance

Corporation (IFC), TTB developed two products in The Corporate Initiative Ghana in May 2008

2006 and 2007. In 2006, TTB/IFC developed a adjudged The Trust Bank Limited as the Corporate

schools finance scheme that enabled basic private Bank for the year 2007. The award was based on our

schools obtain medium term local currency financing financial performance as well as the quality of our

for capacity expansion. customer relationship management.

In 2007, TTB/IFC implemented a trade finance facility “Bank with us and enjoy the benefits of modern

which has enabled our clients to establish L/Cs to banking”. Experience the difference.

beneficiary countries and regions which hitherto Our major products offerings include:

were difficult to trade with. The facility affords us the Overdrafts

opportunity to establish deferred L/Cs up to thirty six Short to medium-term loans (all currencies)

months. Commodity trade finance

Assets backed finance (inventory, receiva-

Our business development efforts have taken new bles).

dimensions. We provide innovative financial Cash management & Investments

solutions to suite the needs of organized trade International trade services & operations

associations without the need for collateral. Invoice Discounting

Bonds and Guarantees

Collateral Management agreements (CMA)

Adding value to our client businesses has always been or Warehousing Facility

of prime importance to us. We understand that the Local Purchase Order (LPO) financing

continuous existence of their businesses ensures that Import Clearing Facility (IFC)

we continue to be in business. In the past, we have

organized courses for our selected clients to upgrade

their appreciation of basic issues inherent in:

Corporate Bank of the year 2007

Value Addition/Customer focus

PassionateSolutions



21

Management: Osei Asafo-Adjei Post Office: Martin Nartey

+233 21 230422 +233-21-673086

Key Contacts:

Accra Ernest Obuobisa-Darko Tesano: Emmanuel Awuah

+233 30 701 28 53 +233-22-243558

Rodney Saint Acquaye Tema: Nana Yaw Kootin-Sanwu

+233 21 252764 +233-22-243558

Afia Serwaa Attrams (Mrs.) Nicholas Victor Agbenu

+233 30 701 14 90 233-22-413619

Baafuor Abankwa Kumasi: Joseph Acheampong

+233 21 252 763 +233-51-21417, 26045

Kafui Dzameshie Elizabeth Lillian Owusu-Yeboah

+233 30 701 07 58 +233-51-24117, 26045

[email protected] [email protected]






PassionateSolutions



22

Always About YOU

Our product and service offerings include:

Unique Proposition

The TTB Kiddies Account is a savings vehicle devised

Our trademark Customer Relationship Management for our younger customers (0 – 18 years old). It is

style of a two-man team devoted to each customer recommended for parents and guardians who wish to

ensures constant accessibility and easy communi- provide a nest egg for their children and wards by

cation towards delivering the express attention and opening the account in their name and transferring

care our esteemed customers desire and truly the account to the child upon attainment of 18 years.

deserve. This dedication to your convenience is Not only does this inculcate the savings habit into the

underscored by our placing a unit in each and every child but ultimately helps secure their future.

branch to provide the sturdy support to your business

and consumer needs. We are steadfast in our pledge

to deliver superlative service and spot-on solutions to Business Advisory Services to provide the

you because it is mutual: we are partners in your requisite knowledge support for your business.

endeavours! Private Banking for High Networth Indivi-

duals and Professionals.

Our desire to move your business to the next success Domestic and International transfer services

level is seen in our constant interaction with you to Tailored credits for individuals, professionals

share ideas and impart business knowledge. We and small businesses

provide basic ‘one-on-one’ coaching in banking and Personal Loans

management best practices such as bookkeeping, Executive Loans

marketing strategies, time management, proper Loans for purchasing of gadgets for professional

account operation, facility utilisation etc. The result practice.

of this is growth in business for our mutual benefit. Overdrafts

Loans for Ghanaian professionals returning/

setting up at home

Being completely in tune with the operations and Business Loans

needs of our valued customers, we design products Group Lending Scheme

that anticipate and decisively meet those needs. LPO Financing

Bonds and Guarantees and many more

Our Import Clearing Facility, granted to both Family saving instruments and investment

borrowing and non-borrowing customers, has been services.

hailed by many of our customers for its Electronic card services including e-zwich

responsiveness. This facility is designed for the Fixed Deposit

payment of Import Duty, Freight and Part/Full- Call Deposit

payment of additional consignment of goods and Current account

patently aimed at the traders and importers among our Savings account

customers. Gold Account

COMMERCIAL & CONSUMER BANKING

At Commercial & Consumer Banking (CCB), we offer a hands-on approach to meeting the needs of our Individual, Professional and Small Business customers imaginatively and efficiently. Our focus is on providing customised solutions to meet diverse customer needs with a view to engendering satisfaction, confidence and trust.

PassionateSolutions



23

At Your Doorstep

Doing More For YOU

In Good Hands

Our Banking train chugs right to your door with our TTB online

17 branches / outlets located in the main commercial same day ATM card

centres of Accra, Tema and Kumasi. Our services can Ezwich card and POS machines

be availed from Monday through to Saturday. Indeed, on-line request for statement,

we are right on hand where, when and how you need foreign exchange rate enquiry

us. interest rate enquiry

cheque book request and status of request

funds tranfer to own and third party accounts

Our particular support for our customers is far- Letter of Credit & Bank Guarantee Applica-

reaching. It extends to various sectors of the economy tion

— construction, services, commerce, manufacturing cheque and IPC discounting

and many more. We have particularly supported Instant loans/overdrafts against cash/T-bills

professionals such as doctors, architects to either and many more

acquire professional gadgets to enhance their practice

or improve/ build their houses.

The CCB team is made up of well-trained

Our pledge for the years ahead is to constantly professionals with several years of relevant

evaluate the effectiveness and efficiency of our experience. We continue to invest in training and up

service to our customers. This is to ensure that we are skilling the team to build an improved knowledge and

not only effective in satisfying our customer’s needs, skills set. This ensures that our valued customers are

but that we are exceeding their expectations. served by people who know and can understand your

peculiar needs and provide solutions that work for

Our new banking software has enhanced our capacity you.

to offer range of services to our cherished customers…

PassionateSolutions



24

Management: Robert Danso-Boakye Tema: Samuel Ofori-Antwi

+233-21-230415 +233 - 22- 213705/6

Ophelia Attobrah Tesano: Kwadwo Kyei Gyeabour

+233-21-252761 +233 -30- 7011576

Business Centres: Kumasi: Sefa Dankwa

Accra: Alex Ashong +233 - 51- 21416

+233-30-7011577

Diana Opoku

Fred Amo Atakora +233-51-21416

+233-30-7011576

Vincent Larbi Opare

Charlotte Amanquah +233-51-80552

+233-30-7011577



[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

PassionateSolutions



25

mailto:[email protected]

Institutional Banking is a dedicated line of business FX Trading is another activity performed in the

for TTB’s Wholesale Banking and Treasury Treasury Unit. Treasury engages in the buying and

Management. We offer a broad range of selling of foreign currency from both customers and

sophisticated, high quality products and services non- customers at very attractive rates.

specifically designed to meet the financial needs of

institutional clients. The Institutional Banking team in

TTB drives the bank’s relationship with banks in and Liquidity management ensures the right balance

outside Ghana, non-bank financial institutions, among assets, liabilities and funds flow. TTB offers a

discount houses, insurance companies, asset variety of liquidity management techniques. One of

manage-ment companies, government institutions, suct techniques is the sweeping call account, which

non-governmental organizations, churches, associa- allows you to sweep your cash overnight from your

tions and societies. Our focus is on the mid-market. current account to a higher yielding account. This

means on daily basis, after settling all payments on

your accounts, excess funds are transferred to the

sweeping call account as overnight investment on

your behalf.

Having motivated and highly skilled people working

in Institutional Banking is the key to our success. We

have a relationship management team that works Account Management: Gold a/c; Current a/c;

from the head office to serve all institutional clients Savings a/c;Foreign, Forex a/c etc

across the bank’s networked branches. It comprises of Foreign Exchange operations in all major

a Business Manager, four relationship managers and international currencies

two account managers. The team works with you International payment services

towards understanding your needs and ensuring the Personal Investment Plan Account (which

delivery of appropriate products and services. Our offers very competitive yields for six months

Relationship Managers are specialized, tenured to 1 year deposits.)

professionals with a deep commitment to and Cash Pick services

knowledge of the clients they serve. Our focus is on Online Banking - which provides you with

building long-term relationships and standing by our information on your account anytime any-

clients whenever they need us. The Treasury arm where, enabling you to track every transac-

works hand in hand with the Relationship tion

management team to ensure all your investment

objectives and needs are met.

In the management of government project funds, we

have developed payment systems (payroll

The treasury unit focuses on efficient cash management, bill payment services, direct debit

management processes to execute payments, payment facilities etc) to help create efficiency in

collection of receivables and manage the liquidity payments administration and free our customers from

thereof. The unit provides efficient payment systems rudimentary processes in catering for their

such as RTGS (Real Time Gross Settlement) which is administrative duties in their financial manage-ment

an electronic same-day-value payment facility. processes.

Liquidity Management

A strong team

Relationship Management

Other services include:

Operational Account

The Treasury Team

INSTITUTIONAL BANKING

PassionateSolutions



26

Fund Management Credits

International Payments & Cash Management

Other Treasury and Investment Products

Advisory Services

We have established a sound track record in the Short term loans and overdrafts to meet working

management of foreign and local funds for donor capital requirements of financial institutions;

agencies, government project funds, international guarantees and trade finance products all of which are

and local NGOs. carefully structured to meet the customers’ needs.

We provide provident fund (PF) management services

for customers’ employees. We manage the funds as a Foreign account management services.

block investment or on individual staff’s behalf. Products and services in major currencies

Customers’ funds are invested in accordance with the such as EUR and GBP, USD.

stated investment objectives all with the view to

enhancing the relationship. Our international expertise, coupled with local

experience has enabled us to tailor and adapt our

services to suit your needs and this resulted in our

Our product offering includes Fixed deposit, Call customers voting as the Bank of the year 2007.

deposit and Treasury bills management services.

Treasury purchases Treasury Bills on behalf of

customers and non-customers from Bank of Ghana We have a team of well trained staff who provide

and the government at a commission. Customers are advice to support customers to achieve and sustain

also able to rediscount their Treasury Bills should they their business and investments objectives.

need liquidity before maturity of the bills. We provide passionate solutions for our institutional

clients.

PassionateSolutions



27

Management: Naomi Kwetey Florence Essel

( Business Manager) +233-21-240054

+233-30-7012226

Bassanio Kwame Gyebi

Contact: +233-21-240054

Justice Kwapong Kumi

(Ag. Treasurer)

+233-21-230413 Abena Engmann

+233-21-240054

Carl Benjamin Hammond

(Corporate Dealer) Kennedy Okai

+233-21-230429 +233-21-230413

Christopher Akrong Louisa Ampaw Appiah

+233-21-230413 +233-21-240054

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]



PassionateSolutions



28

Our Retail Banking team services are provided by a found to the issues raised in a more timely manner.

team of well-trained, courteous and customer-

friendly staff who will go the extra mile to delight you Considering the fact that we cherish our business

with warm reception and efficient customer service. relationship, we feel committed to renew our pledge

to be as close to you as possible so we can understand

The main focus of the Retail Banking and Funds better the workings of your business. This close

Transfer Services Team is to identify our customers relationship and collaboration affords us the

retail banking needs and fashion out innovative and opportunity to offer you the most cost-effective and

profit-driven solutions in a manner that promotes profit-driven business advisory services.

growth and development in our customers' business.

With seventeen fully networked branches and fifteen

automated teller machines (ATM) we assure our Over the past five years, we have been providing you

customers of excellent banking services at their with utmost flexibility, speed and reliability in

convenience. Most of our branches provide extended accessing funds transferred from overseas and would

banking hours and Saturday services. continue to provide more proximity and convenience

for the collection of your Inward funds transfers.

To re-emphasise our commitment to delighting our

customers and making them feel noticed and We have also entered into Collaborative Agreements

appreciated, we have engaged Customer Service with reputable Companies to provide expanded

Executives in our banking halls to interact with opportunities for the movement of domestic funds

customers to ensure that we “listen and hear” your within the country.

voices on a timely basis. This move is aimed at

hearing our customers concerns on timely basis to We are currently exploring other business collabo-

enable us provide long lasting solutions to whatever rations with reputable International Money Transfer

challenges our customers have. This innovation is Organizations to enable us expand the platforms for

also aimed at strengthening the interface between our providing our valued customers and the general

customers and our service delivery chain. In the public with more diverse International Funds Transfer

process, the concerns and suggestions of our valued products.

customers are taken note of and prompt solutions

Western Union and Vigo Money Transfer Services

RETAIL BANKING & FUNDS TRANSFER SERVICES

PassionateSolutions



29

Management:

Ben Shamo(Business Manager)+233 - 21 - 7011604

Key Contacts :

Accra SakumonoReginald Osam Sita Pearl Monnie+233 - 30 – 7011352 +233 - 22 – 413617/8

Post Office KasoaEvans Asante Sikayena Rose Kumah+233 - 21 – 673083 +233 - 21– 862886

Trust Towers Kumasi MainPaulina Mensah Eugene Amo Mesi+233 - 21 - 238121 +233 - 51 – 21415/7

Tesano Suame MagazineJohn Anim Adjei Emmanuel Kwame Asiedu +233 - 21 - 237317 +233 - 51 - 30229

Madina AshtownJoseph Cleland-Okine Emmanuel Atta-Saow Poku+233 - 21 – 513321/2 +233 - 51 - 80699

Kantamanto KwashiemanPhillip Kofi Adomako Felix Tsaatse Adjoteye+233 - 21 – 678243/5 +233 – 244 - 341762

Tema Main KissiemanNana Amponsaa Sarfo Emelia Adwoa Amoah+233 - 22 – 308439/40 +233 – 244 - 341764

Tema Community 1 Money TransferBen Adotey Jacob Aboagye+233 - 22 – 213705/6 +233 - 21 - 246501

[email protected]









RETAIL BANKING STAFF

PassionateSolutions



30

Preamble

1. Principles of Sound Governance

2. Major Committees and Charters

3. Role of the Board of Directors

business, defining its risk management and control

TTB is going great lengths to promote corporate processes. It also devotes substantial time to strategic

fairness, accountability and transparency. thinking and guidance. TTB’s Board takes deep

interest in the evaluation of senior management, both

in terms of performance, competence and integrity,

The system by which our bank’s operations are and the efficiency of management control.

directed and controlled is based on a segregation of

powers that specify the distribution of rights and

responsibilities among different participants in the The Executive Committee has mandated various

corporation, such as shareholders, the board, committees, on which sit at least two of its members,

managers, and other stakeholders. to take decisions within the delegated areas of

authority. The most significant Committees are:

At TTB, we acknowledge that people are more

important than structures of guidance & control. The The Management Credit Committee

first thing a new member of staff would be taught and

tested on is the company’s code of conduct as much The Risk Management & Compliance Commi-

as its corporate culture and tone. It is one of TTB’s ttee, which is responsible for managing

most important policies and procedures to help to operational risks and achieving compliance with

ensure that its agents’ actions are correctly executed laws and regulations, especially those combating

and timely. money laundering and financing of illegal

activities.

In addition, all management decisions on banking

business are made through the Executive Committee The Asset and Liability Management Committee,

(or specifically established sub-committees). It which is responsible for managing interest rate

assumes a collective responsibility, without dominant and exchange rate risks, as well as liquidity and

interference from one member or for that matter, the bank’s balance sheet

Board members. In addition to the collective respon-

sibility, a clear and appropriate set of significant The Human Resources Committee, respon-

responsibilities has been allocated to the individual sible for all staff-related matters including

members of the Executive Committee, in such a way remuneration policy, performance incen-

that it is clear who has which of these responsibilities, tives and training.

and so that these responsibilities can be adequately

carried out under the control of the Executive TTB adheres to a code of professional ethics, core

Committee. Management has also introduced clear values and management principles that is common to

procedures by clearing out the organisation chart (to the entire Fortis group including Belgolaise. It has

avoid incompatibilities and conflicts of interest), formally adopted the Audit Charter, Credit Charter

implementing reliable information systems and and Compliance Charter and finally, the Banking

keeping the Shareholders informed about any Code (from Ghana Association of Bankers’).

potential conflict of interest.

The Board of Directors is responsible for supervising The role of the Board of Directors is to supervise the

management, monitoring the state of the bank’s policies of the Executive Committee and the general

TTB CORPORATE GOVERNANCE FRAMEWORK

PassionateSolutions



31

affairs of the company and any affiliated enterprise, as company, taking into consideration the interest of

well as to assist the Executive Committee by providing stakeholders. It is responsible for compliance, for

advice. In discharging its role, the Board of Directors managing the risks, including internal risk manage-

shall be guided by the interests of the company and ment and control systems. It shall report related

any affiliated enterprise, and shall take into account developments to and shall discuss the internal risk

the relevant interests of the company's stakeholders. management and control systems with the Board of

The Board of Directors is responsible for the quality of Directors and its Audit Committee.

its own performance.

The Executive Committee shall ensure that all

employees have the possibility of reporting

The role of the Executive Committee is to manage the alleged irregularities of a general, operational or

company, which means, among other things, that it is financial nature to the Chairman of the Executive

responsible for achieving the company’s aims, Committee (or to an official designated by him)

strategy, policy and results. The Executive Committee without jeopardising their legal position. Alleged

is accountable for this to the Board of Directors and to irregularities concerning Executive Committee

the Shareholders. In discharging its role, the Executive members shall be reported to the Chairman of the

Committee shall be guided by the interests of the Board of Directors.

4. Role of the Executive Committee

PassionateSolutions



32

REPORT OF THE DIRECTORS

PassionateSolutions



33

In accordance with the requirements of Section 132 of the Companies Code, we the Board of The Trust Bank

Limited submit herewith the Annual Report on the state of affairs of the Bank for the year ended 31 December,

2008.

Financial results Restated

2008 2007

GH¢ GH¢

Operating income 37,369,765 25,757,243

Profit before taxation 13,134,202 10,469,812

From which is deducted:

Tax liability (3,573,798) 2,460,581)

Leaving a net profit after tax of 9,560,404 8,009,231

Which is to be added to the income surplus

brought forward from the previous year 6,962,188 1,298,698

Making a total of 16,522,592 9,307,930

Out of which is deducted:

Dividend paid (2,020,131) -

Transfer to other reserves (636,851) (343,435)

Transfer to statutory reserve fund of (2,390,101) (2,002,308)

Leaving a net balance on the income surplus account of 11,475,508 6,962,187

The principal activity of the Bank during the year and in accordance with Section 2 of the regulations of the Bank

continues to be banking and finance. This represents no change from the activities carried out in the previous

year.

The names of the directors who served during the year are provided at Page 4 of this report. No director or officer

had any interest in the shares of the Bank. No director had a material interest, at any time during the year, in any

contract of significance, other than a service contract with the Bank.

In accordance with Section 134(5) of the Companies Code 1963. the auditors, Messrs. Deloitte & Touche

continue in office as auditors of the Bank.

On behalf of the Board

............................................... .........................................

Director Director

Principal activity

Directors

Auditors

Report on the Financial Statements

Directors’ Responsibility for the Financial Statements

Auditors’ Responsibility

Opinion

We have audited the accompanying financial statements of The Trust Bank Limited, as at December 31, 2008, set

out on pages 7 to 47 which have been prepared on the basis of the significant accounting policies on pages 10 to

18 and other explanatory notes on pages 19 to 47.

The Directors are responsible for the preparation and fair presentation of these financial statements in accordance

with the Companies Codes 1963, (Act 179) and the Banking Act 2004, (Act 673). This responsibility includes:

designing, implementing and maintaining internal control relevant to the preparation and fair presentation of

financial statements that are free from material misstatement, whether due to fraud or error; selecting and

applying appropriate accounting policies; and making accounting estimates that are reasonable in the

circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with International Standards on Auditing. Those standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the

risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

financial statements 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 entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion.

In our opinion, the Bank has kept proper accounting records and the financial statements are in agreement with

the records in all material respects and give in the prescribed manner, information required by the Companies

Codes 1963, (Act 179) and the Banking Act 2004, (Act 673). The financial statements give a true and fair view of

the financial position of The Trust Bank Limited as at December 31, 2008, and of its financial performance and its

cash flows for the year then ended, and are drawn up in accordance with the Statement of Accounting Standards

issued by the Institute of Chartered Accountants, Ghana and relevant International Financial Reporting Standards.

REPORT OF THE INDEPENDENT AUDITORSTO THE MEMBERS OF THE TRUST BANK LIMITED

PassionateSolutions



34

Report on Other Legal and Regulatory Requirements The Ghana Companies Code, 1963 (Act 179) requires that in carrying out our audit work we consider and report

on the following matters. We confirm that:

i. we have obtained all the information and explanations which to the best of our knowledge and

belief were necessary for the purposes of our audit;

ii. in our opinion proper books of accounts have been kept by the bank, so far as appears from our

examination of those books; and

iii. the balance sheet and income statements of the bank are in agreement with the books of

accounts.

PassionateSolutions



35

REPORT OF THE INDEPENDENT AUDITORSTO THE MEMBERS OF THE TRUST BANK LIMITED

PassionateSolutions



36

The Banking Act 2004 (Act 673), Section 78 (2), 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 its results for the

period under review;

ii. we were able to obtain all the information and explanation required for the efficient

performance of our duties as auditors;

iii. the bank's transactions are within its powers; and

iv. the bank has complied with the provisions in the Banking Act 2004 (Act 673) and the Banking

(Amendment) Act 2008 (Act 738).

Chartered Accountants

Accra, Ghana

17th March, 2009

Notes 2008 2007

Interest income 7 38,181,094 23,666,442

Interest expense 8 (14,189,303) (6,828,088)

Net interest income 23,991,791 16,838,354

Fees and commission income 9 6,815,300 4,965,312

Fees and commission expense 10 (62,383) (87,847)

Other operating income 11 6,625,057 4,041,424

Operating income 37,369,765 25,757,243

Operating expenses 12 (19,683,755) (13,356,929)

Impairment loss 14 (4,551,808) (1,930,501)

Profit before taxation 13,134,202 10,469,812

Income tax expense 16 (3,573,798) (2,460,581)

Profit after tax transferred to income surplus account 9,309,573 250,831

9,560,404 8,009,231

For the year ended 31 December, 2008

2008 2007

Income and expense recognised directly in equity: - -

Profit for the year 9,560,404 8,009,231

Total recognised income and expense for the period 9,560,404 8,009,231

The accompanying notes form an integral part of these financial statements.

STATEMENT OF RECOGNISED INCOME AND EXPENSE

PassionateSolutions



37

INCOME STATEMENT

BALANCE SHEET

PassionateSolutions



38

As at 31 December, 2008(All amounts are expressed in Ghana cedis)

Assets Notes 2008 2007

Cash and balances with Bank of Ghana 17 26,867,806 45,165,840

Treasury bills and other eligible bills 18 23,410,056 20,966,254

Due from other banks 19 25,107,618 28,928,360

Loans and advances to customers 20 161,912,902 107,723,462

Investment in associated companies 22 202,000 202,000

Property and equipment 23 2,867,945 1,729,719

Intangible assets 24 1,133,089 1,684,310

Other assets 25 11,490,289 14,387,676

Taxation 16 14,327 -

Total assets 253,006,031 220,787,621

Liabilities

Due to financial and other institutions 53,909,079 42,262,095

Due to customers 26 123,305,910 109,774,564

Other borrowed funds 27 17,823,712 4,534,126

Interest payable and other liabilities 28 28,565,075 41,869,128

Taxation 16 - 598,164

Total liabilities 223,603,776 199,038,077

Shareholders' fund

Stated capital 32 7,000,000 7,000,000

Income surplus 11,475,508 6,962,187

Statutory reserve fund 31 9,828,460 7,438,359

Other reserves 33 1,098,289 348,998

Total shareholders' fund 29,402,257 21,749,544

Total liabilities and shareholders' fund 253,006,031 220,787,621

The Board of Directors approved the financial statements on 20th March, 2009.

…………………………......… ……………………………

Director Director

For the year ended 31 December, 2008 (All amounts are expressed in Ghana cedis)

2008 2007

Operating activities

Operating profit 13,134,202 10,344,365

Adjustment to reconcile profit before tax to net cash flows

Non-cash:

Depreciation 1,567,366 995,889

Impairment of loans & advances 4,551,808 1,733,431

Income tax paid (4,117,328) (1,925,000)

Profit on disposal of investment - (1,207,279)

Profit on disposal of property, plant & equipment - (419,040)

Working capital adjustments

Increase in loans and advances (58,741,248) (39,580,919)

Decrease/(increase) in other assets 2,897,387 (9,828,633)

Increase in amounts due to customers 13,531,346 38,949,372

(Decrease)/increase in other liabilities (13,281,067) 29,154,510

Net cash used in operating activities (40,457,534) 28,216,697

Investing activities

Purchase of property, plant & equipment (1,980,617) (1,859,934)

Proceeds from sale of property, plant & equipment - 536,559

Purchase of treasury bills and other eligible bills (2,814,065) (470,495)

Proceeds from sale of investment securities - 1,250,404

Net cash used in investing activities (4,794,682) (543,466)

Financing activities

Proceeds from borrowed funds 14,036,570 3,297,400

Repayments of borrowed funds (746,984) (531,520)

Dividend paid (2,020,131) (1,961,909)

Net cash flow from financing activities 11,269,454 803,971

Increase in cash and cash equivalents (33,982,761) 28,477,203

Cash and cash equivalents at 1 January 32,201,920 3,724,717

Cash and cash equivalents at 31 December (1,780,842) 32,201,920

The accompanying notes form an integral part of these financial statements.

CASH FLOW STATEMENT

PassionateSolutions



39

PassionateSolutions


TB’s Corporate Social Respon-

sibility covers the continuing

commitment by the bank, to Tbehave ethically and contribute to

economic development while improving

the quality of life of our staff and their

families as well as the local communities

within the bank’s catchment areas and

society at large. These include those

responsibilities which do not have

financial returns but which are demanded

of us under social contracts with our

publics/stakeholders.

ur donations policy is tilted in

favour of education, health, Otradition & culture and sports. In

the past few years, the bank has

conscientiously discharged its corporate

social responsibility obligations by donating

in cash and kind to beneficiary institutions of

all kinds from diverse backgrounds. The

bank disbursed GH¢40,000 to various

charitable organizations, ventures and

projects in 2004, GH¢47,000 in 2005,

GH¢70,000 in 2006 and a colossal

GH¢129,443 in 2007.


Passionate Solutions

ast year, the bank made donations of

GH¢4,000 each to twelve (12) deprived

public basic schools spread across the LGreater Accra, Ashanti and Central Regions by

providing reading books and teaching aids at a

total cost of GH¢48,000. The bank also presented

GH¢10,000 to the Maternity Ward of the Korle-

Bu Teaching Hospital in Accra, GH¢5,000 to the

Ghana Society for the Blind among other

corporate donations and sponsorships, which

also summed up to about GH¢49,649, bringing

total disbursements for 2008 to about

GH¢112,649.

Representatives of one of the beneficiary institutions displaying their cheque.

Representatives of the Maternity block of Korlebu Teaching Hospital receiving a cheque for

GH¢10,000 from the Board Chairman, Mr. Albert D. Osei

Deprived Public Basic Schools 48,000

Ghana Society for the Blind 5,000

Children's sponsored events 15,000

Maternity Ward of Korle-Bu 10,000

Culture and Tradition 10,000

Rotary Club 2,000

Ghana Future Ladies Golf Ass. 2,000

Others Social Causes 20,500

Total 112,500

PassionateSolutions



Passionate Solutions

1. Reporting entity

2. Basis of preparation

a. Statement of compliance

b. Basis of measurement

c. Use of estimates and judgement

3. Significant accounting policies

Interest income and expense

The Trust Bank Limited (TTB) is a company domiciled in Ghana. The bank's country of incorporation is Ghana

and the address of the bank's registered office is P.O.Box 1862 Accra-Ghana The bank operates under Banking

Act, 2004 (Act 673), and is primarily involved in corporate and retail banking.

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

(IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB). These are TTB's

first set of financial statements prepared in accordance with IFRS and IFRS 1 has been applied. In accordance with

the transitional requirements of these standards, TTB has provided full comparative information.

The financial statements are presented in Ghana cedis which is TTB's functional currency, rounded to the nearest

thousand. They are prepared on the historical cost basis except for the following assets and liabilities that are

stated at their fair values: financial instruments that are fair valued through profit and loss and financial

instruments classified as available-for-sale. An explanation of how the transition to IFRS has affected the reported

financial position, financial performance and cash flows of the bank is provided in note 42 to the financial

statements.

The preparation of financial statements in conformity with IFRS 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 associated assumptions are based on historical experience and various

other factors that are believed to be reasonable under the circumstances, the results of which form the basis of

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

sources. Actual results may differ from these estimates.

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

are recognised 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. In particular, information

about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that

have the most significant effect on the amount recognised in the financial statements are described in notes 6.

Interest income and expense for all interest-bearing financial instruments, except for those classified as held for

trading or designated as fair value through profit and loss, are recognized within interest income and interest

expense in the income statement using the effective interest method. The effective interest rate is the rate that

exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset

or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability. The

effective interest rate is established on initial recognition of the financial asset and liability and is not revised

subsequently.

NOTES TO THE FINANCIAL STATEMENTS

PassionateSolutions



42

Interest income includes interest on loans and advances and placements with other banks, and is recognised in

the period in which it is earned.

Fees and commission income and expenses that are an integral part to the effective interest rate on financial

instruments are included in the measurement of the effective interest rate.

Other fees and commission income are recognised as the related services are performed.

Government securities comprise treasury bills and treasury bonds which are debt securities issued by the

Government of Ghana. These are classified as available-for-sale and are stated at fair value.

Unquoted investments are stated at cost less impairment loss where applicable.

Assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather

than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset

is available for immediate sale in its present condition. Management must be committed to the sale, which should

be expected to qualify for recognition as a completed sale within one year from the date of classification.

Assets classified as held for sale are measured at the lower of the assets previous carrying amount and fair value

less costs to sell.

Property, plant and equipment is stated at cost net of accumulated depreciation and or accumulated impairment

losses, if any. Such costs include the cost of replacing part of the plant & equipment and borrowing cost for long-

term construction projects if the recognition criteria are met. Likewise when a major inspection is performed, its

costs is recognised in the carrying amount of the plant & equipment as a replacement if the recognition criteria are

satisfied. All other repairs & maintenance costs are recognised in the income statement as incurred.

The bank’s policy is to professionally revalue property at least once every five years.

Depreciation on other property, plant and equipment is calculated to write off their cost or valuation in equal

annual instalments over their estimated useful lives. The annual rates in use are:

Computers 33%

Motor vehicles 25%

Furniture and fittings 20%

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written

down immediately to its recoverable amount.

Payments to acquire leasehold interest in land are treated as operating lease prepayments and amortised over the

period of the lease.

Fees and commissions

Government securities

Unquoted investments

Assets held for sale

Property, plant and equipment

Depreciation

Leasehold land

PassionateSolutions



43

Computer software development costs

Computer software development costs recognised as assets are stated at cost less amortisation.

Taxation

Foreign currencies

Offsetting

Statutory reserve

Retirement benefit costs

Generally, costs associated with developing computer software programmes are recognised as an expense as

incurred. However, costs that are clearly associated with an identifiable and unique roduct which

will be controlled by the bank and has a probable benefit exceeding the cost beyond one year, are recognised

as an intangible asset.

Expenditure which enhances and extends computer software programmes beyond their original specifications

and lives is recognised as a capital improvement and added to the original costs of the software.

Amortisation is calculated on a straight line basis over the estimated useful lives not exceeding a period of 3 years.

Current taxation is provided on the basis of the results for the year as shown in the financial statements, adjusted in

accordance with the tax legislation.

Assets and liabilities expressed in foreign currencies are translated into Ghana Cedis at the rates of exchange

ruling at the balance sheet date. Transactions during the year are translated at the rates ruling at the dates of the

transactions. Gains or losses on exchange are dealt with in the income statement.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally

enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the

asset and settle the liability simultaneously.

IAS 39 requires the bank to recognise an impairment loss when there is objective evidence that loans and

advances are impaired. However, Bank of Ghana prudential guidelines require the bank to set aside amounts

for impairment losses on loans and advances in addition to those losses that have been recognised under IAS 39.

Any such amounts set aside represent appropriations of retained earnings and not expenses in determining profit

or loss. These amounts are dealt with in the statutory reserve. The provision for this additional impairment

amounts is to be made only when impairment amounts provided under IFRS rules is lower than the figure to be

provided under BoG Prudential Guidelines.

The bank operates a defined benefits retirement scheme for its employees. The assets of the scheme is held in a

separate trustee administered fund. The scheme is funded by contributions from the employer. Benefits

are paid to retiring staff in accordance with the scheme rules.

The bank also contributes to the statutory Social Security & National Insurance Trust (SSNIT). This is a

defined contribution scheme registered under the National Social Security Act. The bank’s obligations under

the scheme are limited to specific contributions legislated from time to time and are currently limited to a

maximum of 12.5% of an employee's basic salary per month. The bank’s obligations to staff retirement

benefit schemes are charged to the income statement in the year to which they relate.

PassionateSolutions



44

Provision for employee entitlements

Financial instruments

Financial assets

Financial assets at fair value through profit or loss

Loans, advances and receivables

Held to maturity

Available-for-sale financial assets

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is mad

for the estimated liability for annual leave accrued at the balance sheet date.

A financial asset or liability is recognised when the bank becomes party to the contractual provisions of the

instrument.

The bank classifies its financial assets into the following categories: Financial assets at fair value through profit

or loss; loans, advances and receivables; held-to- maturity investments; and available-for-sale assets.

Management determines the appropriate classification of its investments at initial recognition.

This category has two sub-categories: Financial assets held for trading and those designated at fair value through

profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of

selling in the short term or if so designated by management. Derivatives are also categorised as held for trading.

Loans, advances and receivables are non-derivative financial assets with fixed or determinable payments that

are not quoted in an active market. They arise when the bank provides money, goods or services directly to a

debtor with no intention of trading the receivable. Loans and advances are recognized when cash is advanced

to borrowers. They are categorized as originated loans and carried at amortised cost.

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and

fixed maturities that management has the positive intention and ability to hold to maturity. Where a sale

occurs, other than an insignificant amount of held-to-maturity assets, the entire category would be tainted and

classified as available for sale.

Financial assets that are not (a) financial assets at fair value through profit or loss, (b) loans, advances and

receivables, or (c) financial assets held to maturity. Financial assets are initially recognised at fair value plus

transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are

derecognised when the rights to receive cash flows from the financial assets have expired or where the bank

has transferred substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently

carried at fair value. Loans, advances and receivables and held-to-maturity investments are carried at

amortised cost using the effective interest method. Gains and losses arising from changes in the fair value of

“financial assets at fair value through profit or loss” are included in the income statement in the period in

which they arise. Gains and losses arising from changes in the fair value of available-for-sale financial assets

are recognised directly in equity, until the financial asset is derecognised or impaired, at which time the

cumulative gain or loss previously recognised in equity is recognised in the income statement.

Dividends on available-for-sale equity instruments are recognised in the income statement when the bank’s

right to receive payment is established.

PassionateSolutions



45

Fair values of quoted investments in active markets are based on quoted bid prices. Equity securities for which fair

values cannot be measured reliably are measured at cost less impairment.

At each balance sheet date, all financial assets are subject to review for impairment.

If it is probable that the bank will not be able to collect all amounts due (principal and interest) according to

the contractual terms of loans, receivables, or held-to-maturity investments carried at amortised cost, an

impairment or bad debt loss has occurred. The carrying amount of the asset is reduced to its estimated

recoverable amount through use of an allowance account. The amount of the loss incurred is included in

income statement for the period.

If a loss on a financial asset carried at fair value (recoverable amount is below original acquisition cost) has

been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative

net loss that had been recognised directly in equity is removed from equity and recognised in the income

statement for the period even though the financial asset has not been derecognised.

The bank considers evidence of impairment at both a specific asset and collective level. All individually

significant financial assets are assessed for specific impairment. All significant assets found not to be

specifically impaired are then collectively assessed for any impairment that has been incurred but not yet

identified. Assets that are not individually significant are then collectively assessed for impairment together with

financial assets with similar risk characteristics.

Objective evidence that financial assets are impaired can include observable data that comes to the

attention of the bank about the following loss events:

Significant financial difficulty of the borrower

default or delinquency by a borrower,

restructuring of a loan or advance by the bank on terms that the bank would not otherwise consider,

indications that a borrower or issuer will enter bankruptcy,

the disappearance of an active market for a security, or

other observable data relating to a group of assets such as adverse changes in the payment status of

borrowers or issuers in the group, or economic conditions that correlate with defaults in the group.

In assessing collective impairment the bank uses statistical modelling of historical trends of the probability of

default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether

current economic and credit conditions are such that the actual losses are likely to be greater or less than

suggested by historical modelling. Default rates, loss rates and the expected timing of future recoveries are

regularly benchmarked against actual outcomes to ensure that they remain appropriate.

Impairment losses on assets carried at amortised cost are measured as the difference between the carrying

amount of the financial assets and the present value of estimated cash flows discounted at the assets’ original

effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against

loans and advances. Interest on the impaired asset continues to be recognised through the unwinding of the

discount. When a subsequent event causes the amount of impairment loss to decrease, the impairment loss is

reversed through profit or loss.

Impairment and uncollectability of financial assets

Impairment and uncollectability of financial assets

Assets carried at amortised cost

PassionateSolutions



46

Assets carried at fair value

Renegotiated loans

Financial liabilities

Repurchase agreement transactions

Leasing

The Bank as lessor

Impairment losses on available-for-sale investment securities are recognised by transferring the difference

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

subsequent event causes the amount of impairment loss on an available-for-sale debt security to decrease, the

impairment loss is reversed through profit or loss.

However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is

recognised directly in equity. Changes in impairment provisions attributable to time value are reflected as a

component of interest income.

Loans that are either subject to collective impairment assessment or individually significant and whose terms

have been renegotiated are no longer considered to be past due but are treated as new loans. In subsequent years,

the renegotiated terms apply in determining whether the asset is considered to be past due.

Debt and equity instruments are classified, as either financial liabilities or as equity in accordance with the

substance of the contractual agreement.

After initial recognition, the bank measures all financial liabilities including customer deposits and

borrowings other than liabilities held for trading at amortised cost. Liabilities held for trading (financial

liabilities acquired principally for the purpose of generating a profit from short-term fluctuations in price or

dealer's margin) are subsequently measured at their fair values.

Interest-bearing borrowings are initially measured at fair value, and are subsequently measured at amortised

cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and

the settlement or redemption of borrowings is recognised over the term of the borrowings.

Securities purchased from the Bank of Ghana under agreements to resell (“ reverse repo’s”), are disclosed as

balances with the Bank of Ghana as they are held to maturity after which they are repurchased and are not

negotiable/discounted during the tenure. The difference between the sale and repurchase price is treated a

interest and accrued over the life of the repurchase agreement using the effective yield method.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and

rewards of ownership to the lessee. All other leases are classified as operating leases.

Amounts due from lessees under finance leases are recorded as receivables at the amount of the Bank’s net

investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant

periodic rate of return on the Bank’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

PassionateSolutions



47

The Bank as lessee

Contingent liabilities

Fiduciary activities

Cash and cash equivalents

Dividends

Segmental reporting

Comparatives

Amendments to published standards and interpretations not yet adopted

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant

lease.

Letters of credit, acceptances, guarantees and performance bonds 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. These obligations are accounted for as off balance sheet transactions and

disclosed as contingent liabilities.

Assets and income arising thereon together with related undertakings to return such assets to customers are

excluded from these financial statements where the bank acts in a fiduciary capacity such as nominee, trustee

or agent.

For the purposes of the cash flow statement, cash equivalents include short term liquid investments which are

readily convertible into known amounts of cash and which were within three months of maturity when

acquired, less advances from banks repayable within three months from the dates of the advances.

Dividends are charged to equity in the period in which they are declared. Proposed dividends are not accrued

until they have been ratified at the Annual General Meeting.

A segment is a distinguishable component of the bank that is engaged either in providing products or services

(business segment), or in providing products or services within a particular economic environment (geographical

segment), which is subject to risks and rewards that are different from those of other segments.

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the

current year.

The bank has chosen not to early adopt the following standards, amendments and interpretations to existing

standards that were issued, but not yet effective, for the accounting periods beginning on 1 January 2008. The

application of these standards, amendments and interpretations will not have material impact on the Bank's

financial statements in the period of initial application.

IFRS 2 amendments - Share based payment: vesting conditions and cancellations (effective from January 2009);

IFRS 3 revised - Business combinations (effective from 1 July 2009);

IFRS 8 - Operating segments (effective from 1 January 2009);

IAS 27 - Consolidated and separate financial statements (effective from 1 July 2009);

IAS 1 revised - Presentation of financial statements (effective from 1 July 2009)

IAS 23 revised Borrowing Costs (effective 1 January 2009);

IAS 32 amendment - Financial Instruments: Presentation and IAS 1:Presentation of Financial

PassionateSolutions



48

Statements: Puttable Financial Instruments and Obligations Arising on Liquidation (effective from 1 January

2009);

IFRIC 15 - Agreements for the Construction of Real Estates (effective from 1 January 2009)

IFRIC 13 Customer Loyalty Programmes (effective 1 January 2009)

IAS 39 - amendment - Financial Instruments: Recognition and Measurement - eligible hedged items

(effective from 1 July 2009)

The bank’s activities expose it to a variety of financial risks and those activities involve the analysis,

evaluation, acceptance and management of some degree of risk or combination of risks. Taking risk is core

to the bank’s business, and the operational risks are an inevitable consequence of being in business. The

bank’s aim is therefore to achieve an appropriate balance between risk and return and minimize potential

adverse effects on its financial performance. The most important types of risk include:

Credit risk

Liquidity risk

Market risk- includes currency, interest rate and other price risk

Operational risk

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

management framework. The board has established a Board Audit and Finance Sub-Committee and Risk

department to assist in the discharge of this responsibility. The board has approved the following management

committes; Executive Committee ,Credit Committee, Products & Technology Committee, Assets & Liabilities

Committee (ALCO), Human Resource Committee, Operations and Marketing committees which are responsible

for developing and monitoring risk management in their respective areas. These committees report regularly to

the Board of Directors.

The bank’s risk management policies are established to identify and analyse the risks faced by the bank, to set

appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and

systems are reviewed regularly to reflect changes in market conditions, products and services offered. The bank,

through its training and management standards and procedures, aims to develop a disciplined and constructive

control environment, in which all employees understand their roles and obligations.

The bank’s Audit and Finance Committee is responsible for monitoring compliance with the bank’srisk

management policies and procedures, and for reviewing the adequacy of the risk management framework in

relation to the risks faced by the bank. The Audit and Finance sub-committee of the Board is assisted in these

functions by the internal audit and the risk departments. Internal Audit undertakes both regular and ad-hoc

reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk is the risk of financial loss to the bank if a customer or counterparty to a financial instrument fails to

meet its contractual obligations, and arises principally from the bank’s loans and advances to customers and other

banks and investment securities.

4. Financial risk management

Introduction and overview

Risk management framework

I). Credit risk

PassionateSolutions



49

For risk management reporting purposes, the bank considers and consolidates all elements of credit risk

exposure.

The Board of Directors has delegated responsibility for the management of credit risk to the bank's Credit

Committee. The Credit Administration Department, is responsible for oversight of the bank’s credit risk,

including:

Formulating credit policies in consultation with business units, covering collateral requirements, credit

assessment, risk grading and reporting, documentary and legal procedures, and compliance with

regulatory and statutory requirements.

Establishing the authorisation structure for the approval and renewal of credit facilities. Authorisation

limits are allocated to Business Line Managers. Larger facilities require approval by the Credit Committee

or the Board of Directors as appropriate.

Reviewing and assessing credit risk. The Credit administration department assesses all credit

exposures in excess of designated limits, prior to facilities being committed to customers by the business

unit concerned. Renewals and reviews of facilities are subject to the same review process. Limiting

concentrations of exposure to counterparties, geographies and industries (for loans and advances), and

by issuer, credit rating band, market liquidity and country (for investment securities).

Developing and maintaining the bank’s risk grading in order to categorise exposures according to the degree

of risk of financial loss faced and to focus management on the attendant risks. The risk grading system is used

in determining where impairment provisions may be required against specific credit exposures. The current

risk grading framework consists of eight grades reflecting varying degrees of risk of default and the

availability of collateral or other credit risk mitigation. The responsibility for setting risk grades lies with the

final approving executive / committee as appropriate. Risk grades are subject to regular reviews by the

Finance, Information & Technology Committee.

Reviewing compliance of business units with agreed exposure limits, including those for selected

industries, country risk and product types. Regular reports are provided to the credit department on the

credit quality of local portfolios and appropriate corrective action is taken.

Providing advice, guidance and specialist skills to business units to promote best practice throughout

the bank in the management of credit risk.

Maximum exposure to credit risk before collateral held or other credit enhancements The table below represents

the maximum credit risk exposure to the bank at 31 December 2007 and 2008, without taking into account any

collateral held or other credit enhancements attached.

Management of credit risk

PassionateSolutions



50

2008 2007

On- balance sheet items GH¢ GH¢

a) Government securities 23,410,056 20,966,254

b) Deposits Due From financial Institutions

- Local 6,832,119 14,027,461

- Foreign 18,275,500 14,900,899

25,107,619 28,928,360

c) Loans and advances to customers:

Loans to individuals:

- Overdrafts 7,910,025 7,123,556

- Term loans 16,286,661 12,988,774

24,196,686 20,112,330

d) Loans to corporate entities:

- Overdrafts 70,948,382 47,663,845

- Term loans 71,632,299 37,004,818

- Government Of Ghana 4,419,618 7,212,551

147,000,299 91,881,214

Gross loans and advances(including suspended interest) 171,196,985 111,993,544

e) Other assets

- Inter Bank Clearing Items 3,045,862 2,114,599

- Other 8,444,427 12,273,077

11,490,289 14,387,676

Off- balance sheet items

Letters of credit 20,275,903 14,782,171

Letters of guarantee 20,249,863 6,482,494

40,525,766 21,264,665

PassionateSolutions



51

The bank does not perceive any significant credit risk on the following financial assets:

Investments in Government securities and Bank of Ghana.

Off balance sheet items

The table below represents the maximum credit risk exposure to the bank at 31 December 2008,

and after taking into account credit enhancements attached.

Loans and advances to customers

2007 Gross Impairment

amounts allowances Net amounts

GH¢ GH¢ GH¢ %

Neither past due nor impaired 104,762,754 1,036,359 103,726,395 96.29

Past due but not impaired 4,178,304 289,089 3,889,215 3.61

Impaired 3,052,486 2,944,635 107,851 0.10

111,993,544 4,270,083 107,723,461 100.00

2008

Neither past due nor impaired 153,269,532 1,113,675 152,155,857 93.97

Past due but not impaired 6,078,527 733,725 5,344,802 3.30

Impaired 11,848,926 7,436,683 4,412,243 2.73

171,196,985 9,284,083 161,912,902 100.00

Impaired loans and securities are loans and securities for which the bank determines that it is probable that it

will be unable to collect all principal and interest due according to the contractual terms of the loan /

securities agreement(s). These loans are graded 3 to 5 in the bank’s internal credit risk grading system.

Loans and advances where contractual interest or principal payments are past due but the bank

believes that impairment is not appropriate on the basis of the level of security/collateral available and/or the

stage of collection of amounts owed to the bank.

Loans with renegotiated terms are loans that have been restructured due to deterioration in the

borrower’s financial position and where the bank has made concessions that it would not otherwise consider.

Upon satisfactory performance and after restructuring, such loans may be reclassified.

The bank establishes an allowance for impairment losses that represents its estimate of incurred losses in its

loan portfolio. The main components of this allowance are a specific loss component that relates to

individually significant exposures, and a collective loan loss allowance established for banks of

Classification of loans and advances

Impaired loans

Past due but not impaired loans

Loans with renegotiated terms

Allowances for impairment

PassionateSolutions



52

homogeneous assets in respect of losses that have been incurred but have not been identified on loans subject

to individual assessment for impairment.

The bank writes off a loan/security balance (and any related allowances for impairment losses) when the

Credit department determines that the loans are uncollectible. This determination is reached after

considering information such as the occurrence of significant changes in the borrower’s financial position

such that the borrower can no longer pay the obligation, or that proceeds from collateral will not be sufficient

to pay back the entire exposure. For smaller balance standardised loans, charge off decisions generally are

based on a product specific past due status.

The bank holds collateral against loans and advances to customers in the form of cash, 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. Collateral generally is not held over loans and advances to banks, except

when securities are held as part of reverse repurchase and securities borrowing activity. Collateral usually is

not held against investment securities, and no such collateral was held at 31 December 2008

.

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

shown below:

Loans and advances to customers

2008 2007

GH¢ GH¢

Against individually impaired

Property 3,435,057 690,400

Other 426,117 391,327

Against past due but not impaired

Property 5,848,451 1,187,797

Other 886,908 158,657

Against neither past due nor impaired

Property 65,131,614 42,630,763

Other 79,844,781 71,233,223

Total 155,572,928 116,292,167

The bank monitors concentrations of credit risk by sector. An analysis of concentrations of credit risk at the

reporting date is shown below:

Write-off policy

Collateral held

Concentrations of risk

PassionateSolutions



53

Analysis by business segment 2008 2007

¢ % ¢ %

Transport, storage & communication 3,076,488 1.80 3,692,480 3.30

Agriculture, forestry & fishing 23,718,338 13.85 13,389,302 11.96

Manufacturing 44,873,695 26.21 24,983,300 22.31

Construction 19,284,228 11.26 11,336,833 10.12

Commerce & finance 45,595,274 26.63 32,465,055 28.99

Services 27,024,800 15.79 18,092,196 16.15

Staff 3,940,875 2.30 3,444,559 3.08

Miscellaneous 3,683,287 2.15 4,589,819 4.10

Gross loans and advances 171,196,985 100.00 111,993,544 100.00

Less provision for impairment:

Impairment allowance (9,284,083) (4,270,082)

161,912,902 107,723,462

(b) Off balance sheet items (letters of credit and guarantees)

2008 2007

GH¢ % GH¢ %

Transport, storage & communication 335,610 0.83 1,632 0.01

Agriculture, forestry & fishing 280,373 0.69 - -

Manufacturing 5,307,362 13.10 3,058,287 14.38

Construction 10,298,519 25.41 1,486,135 6.99


Services 3,889,704 9.60 494,531 2.33

Miscellaneous 3,294,285 8.13 600,014 2.82

40,525,766 100.00 21,264,665 100.00

The bank’s activities may give rise to risk at the time of settlement of transactions and trades. Settlement risk is

the risk of loss due to the failure of a company to honour its obligations to deliver cash, securities or other

assets as contractually agreed.

For certain types of transactions the bank mitigates this risk by conducting settlements through a

settlement/clearing agent to ensure that a trade is settled only when both parties have fulfilled their contractual

settlement obligations. Settlement limits form part of the credit approval/limit monitoring process described

earlier. Acceptance of settlement risk on free settlement trades requires transaction specific or counterparty

specific approvals from the bank’s risk function.

Liquidity risk is the risk that the bank will encounter difficulty in meeting obligations from its financial

liabilities-

Settlement risk

ii) Liquidity risk

PassionateSolutions



54

The bank’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient

liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring

unacceptable losses or risking damage to the bank’s reputation.

Treasury department maintains a portfolio of short-term liquid assets, largely made up of short-term liquid

investment securities, loans and advances to banks and other inter-bank facilities, to ensure that sufficient

liquidity is maintained within the bank as a whole.

The key measure used by the bank for managing liquidity risk is the ratio of net liquid assets to deposits from

customers. For this purpose net liquid assets are considered as including cash and cash equivalents and

investment grade debt securities for which there is an active and liquid market less any deposits from banks,

debt securities issued, other borrowings and commitments maturing within the next month. Details of the

reported bank ratio of net liquid assets to deposits and balances due to banking institutions and customer

deposits at the reporting date and during the reporting period were as follows:

At 31 December 2008 2007

Average for the period 11.20% 9.50%

Maximum for the period 13.40% 10.00%

Minimum for the period 9.00% 9.00%

Statutory Minimum requirement 9.00% 9.00%

The table below presents the cash flows payable by the bank under non-derivative financial liabilities by the

remaining contractual maturities at the balance sheet date. The amounts disclosed in the table are the

contractual undiscounted cashflows, whereas the bank manages the inherent liquidity risk based on

expected undiscounted inflows.

Management of liquidity risk

Exposure to liquidity risk

Residual contractual maturities of financial liabilities

PassionateSolutions



55

The table below analyses assets and liabilities into relevant maturity groupings based on the remaining period

at 31 December 2008 to the contractual maturity date:

As at 31 December 2008 Up to 3 3-6 6-12 Over

Months Months months 1 year Total

Assets

Cash and balances with BoG 26,867,807 - - - 26,867,807

Treasury bills and other

eligible bills 8,845,535 5,093,699 6,061,468 3,409,354 23,410,056

Due from other banks 25,107,618 - - - 25,107,618

Loans and advances

to customers 60,390,305 33,661,367 32,284,305 35,576,925 161,912,902

Investments in associated

companies - - - 202,000 202,000

Property and equipment 713,587 269,330 - 1,885,028 2,867,944

Intangible Assets 1,133,089 1,133,089

Other assets 3,893,746 4,493,501 3,103,042 - 11,490,288

Tax - - 14,327 - 14,327

Total assets 125,818,598 43,517,896 42,596,231 41,073,307 253,006,03

Up to 3 3-6 6-12 Over

Liabilities Months Months months 1 year Total

Due to financial & other inst. 53,909,079 - - - 53,909,079

Due to customers 37,530,417 21,292,031 18,361,233 46,122,228 123,305,910

Other borrowed funds 4,951,130 3,261,798 1,206,773 8,404,012 17,823,712

Interest payable &

other liabilities 12,274,137 16,290,939 - - 28,565,076

Total liabilities 108,664,763 40,844,768 19,568,006 54,526,239 223,603,777

Net liquidity gap 17,153,835 2,673,129 23,028,225 (13,452,933) 29,402,254

As at 31 December 2007

Total assets 109,730,825 56,684,961 27,168,098 27,203,736 220,787,620


Net liquidity gap 17,213,165 23,389,364 (1,726,669) (17,126,319) 21,749,541

The previous table shows the undiscounted cash flows on the bank’s financial liabilities and unrecognised

loan commitments on the basis of their earliest possible contractual maturity. The bank’s expected cash flows

on these instruments vary significantly from this analysis. For example, demand deposits from customers are

expected to maintain a stable or increasing balance; and unrecognised loan commitments are not all

expected to be drawn down immediately. The gross nominal inflow/(outflow) disclosed in the previous table

is the contractual, undiscounted cash flow on the financial liability or commitment.

ii) Liquidity risk (continued)

PassionateSolutions



56

iii) Market risks

Management of market risks

a) Interest rate risk

Market risk is the risk that changes in market prices, such as interest rate, equity prices, foreign exchange rates

and credit spreads (not relating to changes in the obligor’s/issuer’s credit standing) will affect the bank’s

income or the value of its holdings of financial instruments. The objective of market risk management is to

manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Overall responsibility for management of market risk rests with ALCO. The risk department is responsible for

the development of detailed market risk management policies (subject to review and approval by ALCO) and

for the day to day implementation of those policies.

The bank is exposed to the risk that the value of a financial instrument will fluctuate due to changes in market

interest rates. The maturities of asset and liabilities and the ability to replace at an acceptable cost, interest-

bearing liabilities as they mature, are important factors in assessing the bank’s exposure to changes in interest

rates and liquidity.

Interest rates on advances to customers and other risk assets are either pegged to the bank’s base lending rate.

The base rate is adjusted from time to time to reflect the cost of funds.

The Assets and Liability Committee closely monitors the interest rate trends to minimize the potential adverse

impact of interest rate changes.

The matching and controlled mismatching of the maturities and interest rates of assets and liabilities is

fundamental to the management of the bank.

Interest rate risks - Increase / decrease of 5 % in Net Interest Margin

The interest rate risks sensitivity analysis is based on the following assumptions.

Changes in the market interest rates affect the interest income or expenses of variable interest

financial instruments

Changes in market interest rates only affect interest income or expenses in relation to financial instru-

ments with fixed interest rates if these are recognized at their fair value.

The interest rate changes will have a significant effect on interest sensitive assets and liabilities

and hence simulation modelling is applied to net interest margins.

The interest rates of all maturities move by the same amount and, therefore, do not reflect the potential

impact on net interest income of some rates changing while others remain unchanged.

The projections make other assumptions including that all positions run to maturity.

The table below sets out the impact on future net interest income of an incremental 5% parallel fall or rise in all

yield curves at the beginning of each quarter during the 12 months from 1 January 2008.

PassionateSolutions



57

Amount Scenario 1 Scenario 2

GH¢ 5% Increase in 5% Decrease in

31-Dec-08 Net int. margin Net int. margin

Profit Before Tax 13,134,202 13,790,912 12,477,492

Adjusted Core Capital 18,475,509 18,968,805 17,818,799

Adjusted Total Capital 29,402,258 30,187,298 28,357,157

Risk Weighted Assets (RWA) 185,374,327 194,643,044 176,105,612

Adjusted Core Capital to RWA 9.97% 9.75% 10.12%

Adjusted Total Capital to RWA 15.86% 15.51% 16.10%

Assuming no management actions, a series of such rises would increase net interest income for 2008 by GH¢

656,710.00, while a series of such falls would decrease net interest income for 2008 by GH¢ 656,710.00. Also a

series of such rises would decrease the adjusted core capital to RWA and Adjusted total capital to RWA by 0.22%

and 0.35% respectively, while a series of such falls would increase the adjusted core capital to RWA and Adjusted

total capital to RWA by 0.15% and 0.24% respectively. Both the revised capital ratios are well above the

minimum capital requirement of 8% and 12% respectively.

The bank operates wholly within Ghana and its assets and liabilities are carried in local currency. The bank

maintains trade with correspondent banks and takes deposits and lends in foreign currencies. The bank is

exposed to the risk that the value of financial instruments will fluctuate due to changes in foreign exchange

rates. The bank’s currency position and exposure are managed within the exposure guideline of 30% of the

core capital as stipulated by the Bank of Ghana. This position is reviewed on a daily basis by the management.

The exchange rates used for translating the major foreign currency balances at the year end were as

follows:

2008 2007

GH¢ GH¢

US Dollar 1.2134 0.9650

GB Pound 1.7589 1.9280

EURO 1.7103 1.4220

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

financial position and cash flows. The table below summarises the Bank's exposure to foreign currency

exchange rate risk at 31 December 2008. Included in the table are the Bank's assets, liabilities and off

balance sheet items at carrying amounts categorised by currency. The amounts stated in the table are the cedi

equivalent of the foreign currencies.

b. Foreign exchange risk

Concentration of assets, liabilities and off balance sheet items (currency risk)

PassionateSolutions



58

GHANA

As at 31 December 2008 USD GBP EURO CEDIS OTHERS TOTAL

Assets

Cash and bal. with BoG 4,314,672 1,342,108 646,905 20,564,121 - 26,867,806


eligible bills - - - 23,410,056 - 23,410,056

Due from other banks 15,211,226 546,214 2,518,060 6,832,119 - 25,107,619

Loans and advances

to customers 19,632,456 66,247 1,474,652 140,739,547 - 161,912,902


companies - - - 202,000 - 202,000

Property, plant and

equipment - - - 2,867,944 - 2,867,944

Intangible assets - - - 1,133,089 - 1,133,089

Other assets 458,541 - - 11,031,748 - 11,490,288

Tax asset - - - 14,327 - 14,327

Total assets 39,616,895 1,954,569 4,639,618 206,794,950 - 253,006,031

Liabilities

Due to financial and

other institutions - - - 53,909,079 - 53,909,079

Due to customers 29,252,038 1,082,802 4,437,460 88,533,610 - 123,305,910

Other borrowed funds 444,444 - - 17,379,267 - 17,823,712

Interest payable and

other liabilities 763,107 - 85,780 27,716,188 - 28,565,075

Total liabilities 30,459,590 1,082,802 4,523,241 187,538,144 - 223,603,776

Net on bal. sheet position 9,157,305 871,767 116,377 19,256,806 - 29,402,255

Net off bal. sheet position - - - - - -

Credit commitments 18,104,090 - 5,469,133 - 801,555 24,374,778

As at 31 December 2007

Total assets 43,284,171 2,960,460 5,454,083 169,088,906 - 220,787,620

Total liabilities 32,339,003 3,125,889 4,510,484 159,062,703 - 199,038,079

Net on bal. sheet position 10,945,168 (165,429) 943,599 10,026,203 - 21,749,541

Net off balance sheet position

Credit commitments 1,039,950 - - 8,101,828 - 9,141,778

PassionateSolutions



59

Foreign exchange risk - Appreciation/depreciation of GH¢ against other currencies by 10%.

The foreign exchange risks sensitivity analysis is based on the following assumptions:

Foreign exchange exposures represent net currency positions of all currencies other than other

than Ghana Cedis.

The currency risk sensitivity analysis is based on the assumption that all net currency positions

are highly effective.

The base currency in which the bank’s business is transacted is Ghana Cedis.

The table below sets out the impact on future earnings of an incremental 10% parallel fall or rise in all foreign

currencies at the beginning of each quarter during the 12 months from 1 January 2008.

Assuming no management actions, a series of such rise and fall would impact the future earnings and capital

as illustrated in the table below;

Amount Scenario 1 Scenario 2

GH¢ 10% appreciation 10% depreciation

31-Dec-08 Of GH¢ Of GH¢

Profit Before Tax 13,134,202 12,520,000 13,748,404

Adjusted Core Capital 18,475,509 17,861,307 19,089,711

Adjusted Total Capital 29,402,258 28,788,056 30,016,460

Risk Weighted Assets (RWA) 185,374,327 166,836,894 203,911,760

Adjusted Core Capital to RWA 9.97 10.71 9.36

Adjusted total Capital to RWA 15.86 17.26 14.72

Assuming no management actions, a series of such appreciation would decrease earnings for 2008 by

GH¢614,202. while a series of such falls would increase earnings for 2008 by GH¢614,202. Also a series of

such rises would increase the adjusted core capital to RWA and Adjusted total capital to RWA by 0.01% and

0.01%, while a series of such falls would decrease the adjusted core capital to RWA and Adjusted total capital

to RWA by 0.01%. Both the revised capital ratios are well above the minimum capital requirement of 8% and

12% respectively.

Operational risk is the risk of direct or indirect losses arising from a wide variety of causes associated with the

bank’s processes, personnel, technology and infrastructure, and from external factors other than credit,

market and liquidity risks such as those arising from legal and regulatory requirements and generally

accepted standards of corporate behaviour. Operational risks arise from all of the bank’s operations and are

faced by all business lines.

The bank’s objective is to manage operational risk so as to balance the avoidance of financial losses and

damage to the bank’s reputation with overall cost effectiveness and to avoid control procedures that restrict

initiative and creativity.

The primary responsibility for the development and implementation of controls to address operational risk is

assigned to senior management within each business unit. This responsibility is supported by the

development of overall bank standards for the management of operational risk in the following areas:

iv) Operational risks

PassionateSolutions



60

requirements for appropriate segregation of duties, including the independent authorisation

of transactions

requirements for the reconciliation and monitoring of transactions

compliance with regulatory and other legal requirements

documentation of controls and procedures

requirements for the periodic assessment of operational risks faced, and the adequacy of controls and

procedures to address the risks identified

requirements for the reporting of operational losses and proposed remedial action

development of contingency plans

training and professional development

ethical and business standards

risk mitigation, including insurance where this is effective.

Compliance with the bank’s standards is supported by a programme of periodic reviews undertaken by

Internal Audit. The results of Internal Audit reviews are discussed with the management of the business unit to

which they relate, with summaries submitted to the Audit Committee and senior management of the bank.

The Bank of Ghana sets and monitors capital requirements for the bank.

The banks objectives when managing capital are:

To safeguard the banks ability to continue as a going concern so that it can continue to provide returns

for the shareholders and benefits for the other stakeholders.

To maintain a strong capital base to support the current and future development needs of the business.

To comply with the capital requirements set by the Bank of Ghana.

Capital adequacy and use of regulatory capital are monitored by management employing techniques based

on the guidelines developed by the Bank of Ghana for supervisory purposes. The required information is filed

with the Bank of Ghana on a monthly basis.

The Bank of Ghana requires each bank to:

a) Hold the minimum level of regulatory capital of GH¢7 Million.

b) Maintain a ratio of total regulatory capital; to risk weighted assets plus risk weighted off balance assets at

above the required minimum of 10%;

The bank’s regulatory capital is analysed into two tiers:

Tier 1 capital, which includes ordinary share capital, share premium, retained earnings, after deductions

for intangible assets (excluding computer software), investments in equity instruments of other

institutions and other regulatory adjustments relating to items that are included in equity but are treated

differently for capital adequacy purposes.

5. Capital management

i) Regulatory capital

PassionateSolutions



61

Tier 2 capital, which includes capitalised revaluations reserves; latent revaluation reserves; undisclosed

reserves; revaluation reserves; sub-ordinated loans and hybrid capital subject to a limit of 100% of Tier 1

capital.

The bank’s policy is to maintain a strong capital base so as to maintain investor, creditor and market

confidence and to sustain future development of the business. The impact of the level of capital on

shareholders’ return is also recognised and the bank recognises the need to maintain a balance between the

higher returns that might be possible with greater gearing and the advantages and security afforded by a sound

capital position.

The allocation of capital between specific operations and activities is, to a large extent, driven by optimisation

of the return achieved on the capital allocated. The amount of capital allocated to each operation or activity is

based primarily upon the regulatory capital, but in some cases the regulatory requirements do not reflect fully

the varying degree of risk associated with different activities. In such cases the capital requirements may be

flexed to reflect differing risk profiles, subject to the overall level of capital to support a particular operation or

activity not falling below the minimum required for regulatory purposes. The process of allocating capital to

specific operations and activities is undertaken independently of those responsible for the operation, by Bank

Risk and Bank Credit, and is subject to review by the Bank Credit Committee and or ALCO as appropriate.

Although maximisation of the return on risk-adjusted capital is the principal basis used in determining how

capital is allocated within the bank to particular operations or activities, it is not the sole basis used for

decision making. Account also is taken of synergies with other operations and activities, the availability of

management and other resources, and the fit of the activity with the bank’s longer term strategic objectives.

The bank’s policies in respect of capital management and allocation are reviewed regularly by the Board of

Directors.

In the process of applying the bank’s accounting policies, management has made estimates and assumptions

that affect the reported amounts of assets and liabilities within the next financial year. Estimates and

judgements are continually evaluated and are based on historical experience and other factors, including

expectations of future events that are believed to be reasonable under the circumstances. Revisions to

accounting estimates are recognised in the period in which the estimate is revised and in any future periods

affected. These are dealt with below:

The bank reviews its loan portfolios to assess impairment regularly. In determining whether an impairment

loss should be recorded in the income statement, the bank makes judgements as to whether there is any

observable data indicating that there is a measurable decrease in the estimated future cashflows from a

portfolio of loans, before a decrease can be identified with an individual loan in that portfolio. This evidence

may include observable data indicating that there has been an adverse change in the payment status of

borrowers in a bank, or national or local economic conditions that correlate with defaults on assets in the

bank.

ii) Capital allocation

6. Critical accounting estimates and judgements in applying the bank's accounting policies

a. Impairment losses on loans and advances

PassionateSolutions



62

Management uses estimates based on historical loss experience for assets with credit risk characteristics and

objective evidence of impairment similar to those in the portfolio when scheduling its future cash flows. The

methodology and assumptions used for estimating both the amount and timing of future cash flows are

reviewed regularly to reduce any differences between loss estimates and actual loss experience.

The bank follows the guidance of IAS 39 on classifying non-derivative financial assets with fixed or

determinable payments and fixed maturity as held-to-maturity. This classification requires significant

judgement. In making this judgement, the bank evaluates its intention and ability to hold such investments to

maturity. If the bank fails to keep these investments to maturity other than for the specific circumstances - for

example, selling an insignificant amount close to maturity - it will be required to reclassify the entire class as

available-for-sale. The investments would therefore be measured at fair value not amortised cost.

Critical estimates are made by the directors in determining depreciation rates for property, plant and

equipment.

7. Interest income 2008 2007

(i) Classification

Cash and short-term funds 830,649 488,601

Treasury bills 2,949,102 2,755,771

Loans and advances 34,401,343 20,422,070

38,181,094 23,666,442

(ii) Categorisation

Available for sale financial assets 2,949,102 2,755,771

Loans and receivables 35,231,992 20,910,671

38,181,094 23,666,442

8. Interest expense 2008 2007

Current accounts 472,373 338,733

Time and other deposits 6,004,485 2,268,496

Overnight and call accounts 7,712,445 4,220,859

14,189,303 6,828,088

9. Fees and commission income 2008 2007

Account service charges 1,582,241 1,298,349

Transfers & letters of credit issued 2,187,391 1,667,471

Other 3,045,668 1,999,492

Total fees and commission income 6,815,300 4,965,312

b. Held -to-maturity investments

c. Property, plant and equipment

PassionateSolutions



63

10. Fees and commission expense 2008 2007

Inter-bank transaction fees (62,383) (87,847)

11. Other operating income 2008 2007

Foreign exchange gains less losses 6,142,019 1,906,600

Other income 483,038 2,134,824

6,625,057 4,041,424

Other income

Debt recoveries 430,616 303,733

Dividends and management fees 52,422 1,831,091

483,038 2,134,824

12. Operating expense 2008 2007

Staff costs (note 13) 10,701,503 7,851,839

Depreciation (Note 23 & 24) 1,567,366 995,889

Advertisements and marketing 1,031,293 606,764

Professional services 142,316 116,452

Administrative expenses 5,549,450 3,512,409

Training 503,484 162,416

Directors' remuneration 160,143 82,400

Auditors' remuneration 28,200 28,760

19,683,755 13,356,929

13. Staff costs 2008 2007

Wages and salaries 8,999,817 6,574,155

Social Security Fund contribution 528,251 528,389

Others 1,173,435 749,295

10,701,503 7,851,839

The average number of persons employed by the Bank during the year was 329 (2007: 297).

14. Impairment loss 2008 2007

Portfolio impairment 2,070,530 739,139

Specific impairment 2,481,278 1,191,362

4,551,808 1,930,501

PassionateSolutions



64

15.Financial instruments classification summary

Financial assets

at fair value Held-to- for-sale Total

through profit Loan & maturity financial carrying

& loss receivables investments assets amounts

Cash and balances with

Bank of Ghana - 26,867,806 - - 26,867,806


eligible bills - - - 23,410,056 23,410,056

Due from other banks - 25,107,618 - - 25,107,618

Loans and advances

to customers - 161,912,902 - - 161,912,902


companies - - - 202,000 202,000

Total at 31/12/08 - 213,888,326 - 23,612,056 237,500,382

Cash and balances with BoG - 45,165,840 - - 45,165,840


eligible bills - - - 20,966,254 20,966,254

Due from other banks - 28,928,360 - - 28,928,360

Loans and advances

to customers - 107,723,462 - - 107,723,462


companies - - - 202,000 202,000

Total at 31/12/07 181,817,662 - 21,168,254 202,985,916

Financial

Other liabilities at Total

financial fair values carrying

liabilities through P&L amounts

Due to financial and other institutions 53,909,079 - 53,909,079

Due to customers 123,305,910 - 123,305,910

Other borrowed funds 17,823,712 - 17,823,712

Total at 31/12/08 195,038,701 - 195,038,701

Due to financial and other institutions 42,262,095 - 42,262,095

Due to customers 109,774,564 - 109,774,564

Other borrowed funds 4,534,126 - 4,534,126

Total at 31/12/07 156,570,785 - 156,570,785

Available-

PassionateSolutions



65

16 Taxation Balance Charge for during Balance

1/1/2008 Adjustment the year the year 31/12/2008

Current

Up to 2007 598,164 (68,961) - - 529,203

2008 - - 3,573,798 (4,117,328) (543,530)

598,164 (68,961) 3,573,798 (4,117,328) (14,327)

Tax 2008 2007

Current income tax 3,573,798 2,460,581

3,573,798 2,460,581

The tax on the operating profit differs from the theoretical amount that would arise using the basic tax rate as

follows:

2008 2007

Profit before tax 13,134,202 10,469,812

Prima facie tax calculated at a tax rate of 25% (2007: 25%) 3,283,551 2,617,453

Tax effect of:

Income not subject to tax (3,109,489) (2,061,034)

Expenses not deductible for tax purposes 3,515,445 1,904,162

Income subject to different tax rates (115,709) -

Tax charge 3,573,798 2,460,581

17 Cash and balances with Bank of Ghana 2008 2007

Cash in hand 7,904,322 20,647,601

Balances with Bank of Ghana 18,963,484 24,518,239

26,867,806 45,165,840

Balances with Bank of Ghana includes a mandatory reserve deposit of GH¢12.19million (2007: GH¢6.66

million). These funds are not available to finance the Bank's day to day operations and do not attract interest.

18 Treasury bills and other eligible bills 2008 2007

Bank of Ghana bills - 91 days 152,813 369,815

Bank of Ghana bills - 182 days 6,515,432 581,645

Bonds 16,741,810 20,014,794

23,410,056 20,966,254

Treasury bills and other eligible bills are debt securities issued by the Bank of Ghana for a term of three

months, six months or a year. Bills are carried at their face value less unearned interest. The bonds are two

and three year fixed and floating rate instruments.

Payments

PassionateSolutions



66

19 Due from other banks 2008 2007

Items in the course of collection from other banks 19,376,643 14,900,750

Placements with other banks 5,730,975 14,027,610

25,107,618 28,928,360

20 Loans and advances 2008 2007

Analysis by type of customer

Private enterprises 151,093,341 99,258,237

Individuals 16,162,769 9,290,748

Staff 3,940,875 3,444,559

Gross loans and advances 171,196,985 111,993,544



161,912,902 107,723,462

Analysis by business segment 2008 2007

¢ % ¢ %

Transport, storage & communication 3,076,488 1.80 3,692,480 3.17

Agriculture, forestry & fishing 23,718,338 13.85 13,389,302 19.00

Manufacturing 44,873,695 26.21 24,983,300 19.31

Construction 19,284,228 11.26 11,336,833 7.96


Services 27,024,800 15.79 18,092,196 17.48

Staff 3,940,875 2.30 3,444,559 3.84

Miscellaneous 3,683,287 2.15 4,589,819 7.05

Gross loans and advances 171,196,985 100 111,993,544 100.00



161,912,902 107,723,462

Analysis by type of advance 2008 2007

Overdrafts 78,858,314 54,787,402

Term loans 92,338,671 57,206,142

Gross loans and advances 171,196,985 111,993,544



161,912,902 107,723,462

PassionateSolutions



67

21 Movement in provisions for impairment are as follows: 2008 2007

Balance at 1 January 4,270,082 3,060,991

Net recoveries and write offs 462,193 (721,410)

Net increase in provision 4,551,808 1,930,501

Balance at 31 December 9,284,083 4,270,082

% %

Loan loss provision ratio 5.80 4.12

Gross non-performing loans ratio 6.92 3.85

Ratio of 50 largest exposures 63.88 61.90

22 Investment in associated companies 2008 2007

Balance at 1 January 202,000 245,125

Disposals - (43,125)

Balance at 31 December 202,000 202,000

The associated companies are:

Number of Percentage

Nature of business Shares Interest

1 Exim Guaranty Company Credit guarantee cover to 20,000 1.8

Limited (Ordinary shares) financial institutions and

other credit awarding

agencies

2 Horizon Finance & Leasing Leasing 2,000,000 31

Company Limited

(Preference shares)

All associated companies are incorporated in Ghana.

The Bank disposed off its equity holdings in Horizon Finance & Leasing Company Limited.

PassionateSolutions



68

23 Property, plant & equipment

Furniture Motor Leasehold Capital work

Computers & fittings vehicles land in progress Total

Cost

Balance at 1 Jan. 1,251,726 2,723,022 463,359 146,655 8,176 4,592,938

Additions 587,600 1,184,553 216,640 - - 1,988,793

Transfers - - - - (8,176) (8,176)

Balance at 31 Dec. 1,839,326 3,907,575 679,999 146,655 - 6,573,555

Depreciation

Balance at 1 Jan. 1,155,841 1,355,504 350,268 1,606 - 2,863,219

Charge for the year 254,483 511,862 74,565 1,481 - 842,391

Balance at 31 Dec. 1,410,324 1,867,366 424,833 3,087 - 3,705,610

Net Book Value

At 31 Dec. 2008 429,002 2,040,209 255,166 143,568 - 2,867,945

At 31 Dec. 2007 95,885 1,367,518 113,091 145,049 8,176 1,729,719

24. Intangible assets Computer software Total

Cost

Balance at 1 January 2,113,857 2,113,857

Additions 173,754 173,754

Balance at 31 Dec. 2,287,611 2,287,611

Amortisation

Balance at 1 January 429,547 429,547

Charge for the year 724,975 724,975

Balance at 31 Dec. 1,154,522 1,154,522

Net Book Value

At 31 Dec. 2008 1,133,089 1,133,089

At 31 Dec. 2007 1,684,310 1,684,310

This relates to the cost of purchased software.

PassionateSolutions



69

Profit on disposal of property, plant & equip.

Property & equip. Shares

2008 2007 2008 2007

Cost of assets - 163,274 - 43,125

Accumulated depreciation/valuation gain - (45,755) - 4,895

Net book value - 117,519 - 48,020

Sale proceeds - (536,559) - (1,255,299)

Profit on disposal of assets - (419,040) - (1,207,279)

25. Other assets

2008 2007

Accounts receivable and prepayments 1,923,390 1,369,740

Accrued income 6,100,988 2,518,366

Others 3,465,910 10,499,570

11,490,289 14,387,676

26. Due to customers

2008 2007

Analysis by business

Corporate customers:

- Current/settlement accounts 50,315,538 41,883,395

- Term deposits 10,934,738 11,572,577

Small and medium sized enterprises:


- Term deposits 3,650,026 3,753,642

Retail customers:


- Term deposits 315,716 163,590

123,305,910 109,774,564

Due to customers - continued 2008 2007

Analysis by product

Current accounts 82,718,143 71,360,101

Time deposits 14,900,480 15,489,809

Savings 20,818,806 17,932,601

Others 4,868,481 4,992,053

123,305,910 109,774,564

Analysis by type of depositors

Financial institutions 7,701,026 21,092,037

Individuals and other private enterprises 101,066,940 72,683,322

Public enterprises 14,537,944 15,999,205

123,305,910 109,774,564

20 largest depositors to total deposit ratio 23.06% 32.70%

PassionateSolutions



70

27. Other borrowed funds 2008 2007

FMO, SECO, SIFEM and EDIF Cedi loans 17,284,423 4,060,646

SIFEM Dollar loan 539,289 473,480

17,823,712 4,534,126

Analysis of borrowings

Amount due within one year 3,333,301 1,049,270

Amount due between two and five years 14,490,411 3,484,856

17,823,712 4,534,126

Other borrowed funds represents amounts advanced to the Bank by FMO of Netherlands, one of its

shareholders, Swiss Secretariat for Economic Affairs (SECO), SIFEM and Export Development and

Investment Fund (EDIF) to enable the Bank to provide credit to small and medium scale private enterprises.

28. Interest payable and other liabilities 2008 2007

Creditors 23,810,855 24,395,712

Accruals 2,765,496 1,642,629

Other liabilities 1,988,723 15,830,787

28,565,075 41,869,128

29. Dividends

Proposed and paid dividend 2,020,131 1,585,370

Payment of dividend is subject to the deduction of withholding tax at a rate of 8%.

Dividend income tax

Payments

Balance Provision during Balance

01/01/08 for the year the year 31/12/08

2007 76,299 - (76,299) -

2008 - - - -

76,299 - (76,299) -

30. Reconciliation of movement in capital and reserves

Income

Stated Surplus Statutory Other

Capital Account Reserves Reserves Total

Balance at 1 January 2007 7,000,000 1,298,698 5,436,051 - 13,734,749

Total recognised

income & expense - 8,009,231 - 5,563 8,014,794

Transfer (from)/to reserve - (2,002,308) 2,002,308 - -

Impairment - (343,435) - 343,435 -

Balance at 31 Dec. 2007 7,000,000 6,962,187 7,438,359 348,998 21,749,543

PassionateSolutions



71

Balance at 1 January 2008 7,000,000 6,962,187 7,438,359 348,998 21,749,543

Total recognised income

and expense - 9,560,404 - 112,440 9,672,844

Transfer (from)/to reserve - (2,390,101) 2,390,101 - -

Dividends to equity holders - (2,020,131) - - (2,020,131)

Impairment - (636,851) - 636,851 -

Balance at 31 Dec.2008 7,000,000 11,475,508 9,828,460 1,098,289 29,402,257

31. Statutory reserve fund 2008 2007

At beginning of year 7,438,359 5,436,051

Transfer from income surplus account 2,390,101 2,002,308

At end of year 9,828,460 7,438,359

The statutory reserve fund represents the cumulative amount set aside from annual net profit after tax as

required by Section 29 of the Banking Act, 2004 (Act 673). The proportion of net profits transferred to this

reserve ranges from 12.5% to 50% of net profit after tax depending on the ratio of the existing statutory

reserve fund to paid up capital.

32. Stated capital 2008 2007

Number of Amount Number of Amount

Shares '000 GH¢ Shares '000 GH¢

Authorised:

Ordinary shares of no par value 100,000 100,000

Issued:

For cash consideration 10,000 7,000,000 10,000 7,000,000

10,000 7,000,000 10,000 7,000,000

There is no unpaid liability on any shares and there are no shares in treasury. There are no calls or instalments

unpaid.

33. Other reserves

The other reserve is not distributable and represents the excess of loan provisions computed in accordance

with Bank of Ghana prudential guidelines over the impairment of loans and advances arrived at in

accordance with IAS 39.

34. Cash and cash equivalents

For the purpose of the cash flow statement, cash equivalents comprise balances with less than 91 days

maturity from the date of acquisition, including cash and balances with Bank of Ghana, treasury bills and

other eligible bills, amounts due from and to other banks and dealing securities.

PassionateSolutions



72

2008 2007

Cash and balances with Bank of Ghana (Note 17) 26,867,806 45,165,840

91-day treasury bills (Note 18) 152,813 369,815

Due from other banks (Note 19) 25,107,618 28,928,360

Due to financial institutions (53,909,079) (42,262,095)

(1,780,842) 32,201,920

35. Off balance sheet financial instruments, contingent liabilities and 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 of third

parties.

36. Contingent liabilities 2008 2007

Commercial letters of credit outstanding 20,275,903 14,782,171

Guarantees and indemnities outstanding 20,249,863 6,482,494

40,525,766 21,264,665

Nature of contingent liabilities

An acceptance is an undertaking by a Bank to pay a bill of exchange drawn on a customer. The Bank expects

most acceptances to be presented, but reimbursement by the customer is normally immediate. Letters of

credit commit the bank to make payments to third parties, on production of documents, which are

subsequently reimbursed by customers.

Guarantees are generally written by a 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.

37. Commitments 2008 2007

Undrawn formal stand-by facilities, credit lines and

other commitments to lend 6,555,100 32,933,411

Nature of commitment

Commitments to lend are agreements to lend to a customer in future subject to certain conditions. Such

commitments are normally made for a fixed period. The Bank may withdraw from its contractual obligation

for the undrawn portion of agreed overdraft limits by giving reasonable notice to the customer.

PassionateSolutions



73

38. Country analysis

The amount of total assets and total liabilities held by the Bank inside and outside Ghana is analysed

below:

2008 2007

Outside Outside

In Ghana Ghana In Ghana Ghana

Assets

Cash and balances with Bank of Ghana 26,867,806 - 45,165,840 -

Treasury bills and other eligible bills 23,410,056 - 20,966,254 -

Due from other banks 5,730,975 19,376,643 14,027,610 14,900,750

Loans and advances to customers 161,912,902 - 107,723,462 -

Investments in associated companies 202,000 - 202,000 -

Property and equipment 2,867,945 - 1,729,719 -

Intangible Assets 1,133,089 1,684,310

Other assets, including tax assets 11,490,289 - 14,387,676 -

Taxation 14,327 - - -

Total assets 233,629,388 19,376,643 205,886,871 14,900,750

Liabilities

Due to financial and other institutions 53,909,079 - 42,262,095 -

Due to customers 79,722,614 43,583,296 89,912,341 19,862,222

Other borrowed funds 17,284,423 539,289 4,060,646 473,480

Interest payable and other liabilities 28,565,075 - 41,869,128 -

Tax - - 598,164 -

Total liabilities 179,481,191 44,122,585 178,702,374 20,335,702

39. Related party transactions

The Bank is controlled by Social Security and National Insurance Trust (SSNIT) with 61.11% of the issued

shares.

A number of banking transactions are entered into with related parties in the normal course of business.

These include loans, deposits and foreign currency transactions. These transactions were carried out on

commercial terms and at market rates. The volumes of related party transactions, outstanding balances at

the year end, and related expenses and income for the year are as follows:

i Deposits from Ghana Reinsurance 2008 2007

Deposits at 1 January 1,943,384 -

Deposits received during the year 1,269,618 6,060,907

Deposits repaid during the year (2,117,341) (4,117,523)

Deposits at 31 December 1,095,661 1,943,384

Interest expense on deposits 190,443 241,749

Rent paid during the year 532,725 517,992

ii Loan Repayment - FMO

Loan repaid - 210,416

PassionateSolutions



74

iii Deposits from SSNIT

Deposits at 1 January 17,798,358 744,270

Deposits received during the year 2,598,717 90,713,583

Deposits repaid during the year (1,235,107) (73,659,495)

Deposits repaid during the year 19,161,968 17,798,358

Interest expense on deposits 571,718 108,009

Rent paid during the year 68,500 58,118

40. Social responsibilities

An amount of GH¢72,300 was spent on fulfilling the social responsibility of the Bank (2007: GH¢129,443).

41. Segmental reporting

Business line information is presented in respect of the Bank's three main business lines, namely Financial

Institutions and Money Market (FIM), Medium Enterprises and Corporates (MEC) and Commercial and

Consumer Banking (CCB). The Bank's other business deals with Retail Banking and Funds Transfer (RBFT).

Direct costs where they are easily identifiable are charged directly to these business lines and indirect costs

are centrally managed and standardised basis used to re-allocate such costs to the business lines on a

reasonable basis.

Business Line FIM MEC CCB OTHER TOTAL

Net interest income 3,382,735 12,674,370 6,918,898 1,015,789 23,991,791

Non funded income 3,552,778 4,797,528 4,214,826 812,841 13,377,974

Operating income 6,935,513 17,471,898 11,133,724 1,828,630 37,369,765

Operating expenses (4,230,964) (4,034,829) (11,031,942) (386,021) (19,683,755)

Operating profit before impairment,

Losses and taxation 2,704,549 13,437,069 101,783 1,442,609 17,686,010

Impairment loss (6,208) (2,940,455) (1,420,216) (184,929) (4,551,808)

Operating profit 2,698,341 10,496,614 (1,318,433) 1,257,680 13,134,202

Other income - - - - -

Profit before taxation 2,698,341 10,496,614 (1,318,433) 1,257,680 13,134,202

Taxation - corporate tax - - - (3,573,798) (3,573,798)

Profit after taxation 2,698,341 10,496,614 (1,318,433) (2,316,118) 9,560,404

Total assets 32,835,333 131,096,531 7,567,612 81,506,555 253,006,031


Total shareholders funds 29,402,257

PassionateSolutions



75

42

Exp

lan

atio

n o

f tra

nsi

tio

n to

IFR

S

Bal

ance

Sh

eet

Eff

ect o

f

E

ffec

t of

T

ran

siti

on

to

T

ran

siti

on

to

G

AS

GH

¢

IFR

Ss G

H¢

IFR

S G

H¢

GA

S G

H¢

IF

RSs

GH

¢

IFR

S G

H¢

No

te

1

st Ja

nu

ary

20

07

3

1st

Dec

emb

er 2

00

7

Ass

ets

Cas

h a

nd

bal

ance

s w

ith

Bo

G

1

5,0

57

,77

0

-

1

5,0

57

,77

0

45

,16

5,8

40

-

4

5,1

65

,84

0

Tre

asu

ry b

ills

an

d o

ther

e

ligi

ble

bil

lsa.

20

,52

4,2

65

2

7,0

71

20

,55

1,3

35

2

0,9

60

,69

1

5,5

63

20

,96

6,2

54

Du

e fr

om

oth

er b

anks

11

,21

8,4

02

-

1

1,2

18

,40

2

28

,92

8,3

60

-

2

8,9

28

,36

0

Lo

ans

& a

dva

nce

s

to

cu

sto

mer

sb

.

6

9,5

32

,54

0

50

,91

5

6

9,5

83

,45

5

1

07

,38

0,0

27

3

43

,43

6

1

07

,72

3,4

63

In

vest

men

ts in

ass

oci

ated

co

mp

anie

s

24

5,1

25

-

24

5,1

25

20

2,0

00

-

2

02

,00

0

Pro

per

ty &

eq

uip

men

t

2,6

67

,50

3

-

2

,66

7,5

03

3,4

14

,02

9

-

3

,41

4,0

29

Oth

er a

sset

sc.

3

,79

6,5

70

6

5,5

02

3

,86

2,0

72

1

3,6

25

,20

4

76

2,4

72

14

,38

7,6

76

To

tal a

sset

s

12

3,0

42

,17

4

14

3,4

87

1

23

,18

5,6

61

21

9,6

76

,15

2

1

,11

1,4

70

2

20

,78

7,6

22

Lia

bil

itie

s

Du

e to

fin

anci

al &

oth

er in

stit

uti

on

s

2

2,9

55

,33

8

-

22

,95

5,3

38

4

2,2

62

,09

5

-

42

,26

2,0

95

Oth

er d

epo

sits

-

-

-

-

-

-

Du

e to

cu

sto

mer

s

70

,82

5,1

93

-

7

0,8

25

,19

3

1

09

,77

4,5

64

-

10

9,7

74

,56

4

Oth

er b

orr

ow

ed fu

nd

s

1,7

68

,24

7

-

1

,76

8,2

47

4,5

34

,12

6

-

4

,53

4,1

26

In

tere

st p

ayab

le &

oth

er li

abil

itie

sc.

1

3,6

70

,10

0

6

5,5

02

1

3,7

35

,60

1

4

1,1

06

,65

6

76

2,4

72

41

,86

9,1

28

Tax

pay

able

88

,54

9

-

88

,54

9

5

98

,16

4

-

59

8,1

64

To

tal l

iab

ilit

ies

10

9,3

07

,42

7

65

,50

2

10

9,3

72

,92

8

1

98

,27

5,6

04

76

2,4

72

1

99

,03

8,0

76

PassionateSolutions



76

Shar

eho

lder

s Fu

nd

s

Stat

ed c

apit

al

7

,00

0,0

00

7

,00

0,0

00

7

,00

0,0

00

-

7

,00

0,0

00

Inco

me

surp

lus

acco

un

ta.

1,2

98

,69

6

5

0,9

15

1

,34

9,6

11

6

,96

2,1

87

3

48

,99

8

7

,31

1,1

85

Oth

er re

serv

esa,

b

2

7,0

71

27

,07

1

-

-

-

Stat

uto

ry re

serv

e fu

nd

d.

5,4

36

,05

1

-

5

,43

6,0

51

7

,43

8,3

59

-

7

,43

8,3

59

To

tal s

har

eho

lder

s' fu

nd

s

1

3,7

34

,74

7

77

,98

6

1

3,8

12

,73

3

2

1,4

00

,54

6

34

8,9

98

2

1,7

49

,54

5

To

tal l

iab

ilit

ies

and

shar

eho

lder

s fu

nd

s

1

23

,04

2,1

74

1

43

,48

7

12

3,1

85

,66

1

21

9,6

76

,15

0

1

,11

1,4

70

2

20

,78

7,6

22

No

tes

(a)

Avai

lab

le-f

or-

sale

fi

nan

cial

as

set

hav

e

in

acco

rdan

ce

wit

h

IFR

S

been

m

eas

ure

d

at

fair

val

ue.

In

stat

ing

these

as

sets

at f

air

valu

e, t

he

effe

ct i

s an

in

crea

se i

n t

he

valu

e o

f T

reas

ury

an

d o

ther

eli

gib

le b

ills

an

d O

ther

res

erve

s b

y G

H¢

27

,07

1 f

or

20

06

and

GH

¢5

,56

3 fo

r 20

07

resp

ecti

vely

.

(b)

Pro

visi

on

s fo

r b

ad

deb

t u

nd

er

GA

S w

ere

com

pu

ted

b

ased

o

n

pas

t d

ue

day

s as

se

t o

ut

in

Ban

k o

f G

han

a's

guid

elin

es.

1%

ge

ner

al

pro

visi

on

is

al

so

req

uir

ed

for

con

tin

gen

t li

abil

itie

s.

Un

der

IF

RS

an

imp

airm

ent

loss

ev

alu

atio

n

is

req

uir

ed

and

this

is

d

on

e b

y ca

lcu

lati

ng

the

pre

sen

t va

lue

of

esti

mat

ed fu

ture

ca

sh fl

ow

s an

d co

mp

arin

g th

ese

wit

h th

e ca

rryi

ng

amo

un

ts

of

the

loan

s ad

van

ces

and

a p

rovi

sio

n t

o c

ove

r in

her

ent

risk

of

loss

es i

n l

oan

po

rtfo

lio

s.

Th

is h

as c

ause

d a

n i

ncr

ease

in

lo

ans

and

ad

van

ces

by

GH

¢5

0,9

15

for 2

00

6 a

nd

GH

¢3

43

,43

6 fo

r 20

07

.

(c)

Staf

f lo

ans

un

der

G

AS

are

stat

ed

at

cost

an

d

inte

rest

o

uts

tan

din

g.

Un

der

IF

RS

the

pre

sen

t va

lue

of

all

futu

re

cash

re

ceip

ts

are

dis

cou

nte

d u

sin

g th

e p

reva

ilin

g m

arke

t ra

tes

of

inte

rest

fo

r a

sim

ilar

in

stru

men

t w

ith

sim

ilar

cre

dit

rat

ing.

Sin

ce s

taff

wil

l in

turn

ren

der

th

eir

serv

ices

to

th

e b

ank

in t

he

futu

re,

the

dis

cou

nte

d i

s tr

eate

d a

s an

ass

et a

nd

sp

read

ove

r th

e d

ura

tio

n o

f th

e lo

an.

Th

is

has

cau

sed

an

in

cre

ase

in

b

oth

o

ther

ass

ets

an

d

liab

ilit

y

of

¢6

5,5

02

fo

r 2

00

6

an

d

¢7

62

,47

2

for

20

07

.

PassionateSolutions



77

(d) The effects of the above adjustments on equity is as follows:

Income Surplus Note 1-Jan-07 31-Dec-07

GH¢ GH¢

Impairment loss b. 50,915 343,436

Statutory reserve transfer - -

Total adjustment to equity 50,915 343,436

Other reserves

Mark to market on available for sale securities a. 27,071 5,563

Impairment loss b. 50,915 343,436

Total adjustment to equity 77,986 348,999

Reconciliation of profit 2007

Effect of

Transition to

Note GAS GH¢ IFRS GH¢ IFRS GH¢

Interest income e. 23,102,820 563,623 23,666,443

Interest expense 6,828,088 6,828,088

Net interest income 16,274,732 563,623 16,838,355

Commissions and fee income f. 5,292,194 (414,729) 4,877,465 Other operating income 4,041,424 - 4,041,424

Operating income 25,608,350 148,894 25,757,244

Operating expenses g. 13,333,812 23,117 13,356,930 Bad and doubtful debts expense h. 1,733,431 197,069 1,930,500

Profit before tax 10,541,107 (71,292) 10,469,814

Tax 2,460,581 - 2,460,581

Profit after taxation 8,080,525 (71,292) 8,009,233

(f) Facilities fees under GAS were recognised in fees and commissions income when the facility is granted.

With IFRS facility fees on facilities are spread over the life of the facility, thus the initial charge moved from

commissions and released yearly into commissions. As a result of this, an amount of ¢414,729 for year

2007 has been deferred.

(e,g)As a result of the concessionary rates given to staff on loans granted, under IFRS these discounts are

recognised as assets to be spread over the duration of the loan. This has given rise to an increase in both

interest income and operating expenses of ¢23,117 for the year 2007

h) Under IFRS interest in suspense are written back into income as impairment charge is made against facilities

that are deemed impaired. This has resulted in an adjustment of ¢197,069 both in interest income and bad

debts expense.

PassionateSolutions



78

PassionateSolutions


TTB NETWORK


79

HEAD OFFICE

MADINA

Swift: KUMASI - HARPER ROAD

Website:

E-mail:

LIST OF BRANCHES & LOCATION

ACCRA MAIN SAKUMONO KUMASI

OKOFO HOUSE TEMA MAIN KUMASI - ASHTOWN

TRUST TOWERS TEMA COMMUNITY 1 GENERAL POST OFFICE

TESANO KASOA KWASHIEMAN

KANTAMANTO BUDUMBURAM KISSEIMAN

Reinsurance House

68 Kwame Nkrumah Avenue

P. O. Box 1862

Accra

Tel.: +233 - 21- 24004952

Fax.: +233 –21- 240056/9

TRBLGHAC Old Road Taxi Rank,

www.thetrustbank.com.gh Near Randy Pharmacy, SSNIT Building,

[email protected] Madina, Accra Adum, Kumasi

Tel: +233 - 21- 513321/2 Tel: +233 - 51 - 21416/7

Fax: +233 - 21- 513321 Fax: +233 - 51 - 29254

Reinsurance House, Ocean Waves Hotel, Suame - Magazine

68 Kwame Nkrumah Avenue, Near Sakumono Mobil Service Sta. Suame - Offinso Road,

Adabraka, Accra Sakumono, Accra Kumasi

Tel:+233 - 21- 230416/5, 230403/7 Tel: +233 - 22 - 413617/8 Tel: +233 - 51-30229

Fax: +233 - 21- 240056 Fax: +233 - 22 - 413622 Fax: +233 - 51- 27232

Kwame Nkrumah Avenue, Hospital Road, Dr. Mensah Traffic Light

Near Total Filling Station, Comm. 11 Junction, Tema Ashtown, Kumasi

Adabraka, Accra Tel: +233 - 22 - 308439/40 Tel : +233 - 51 - 80552/6

Tel:+233 - 21-243621/244835 Fax: +233 - 22 - 308460 Fax: +233 - 51 - 80699

Fax:+233 - 21-254693

Sabukwe Road (Farrar Avenue), Near TFS Building, Opposite General Post Office

Accra Community 1, Tema Accra Central

Tel: +233 - 21-238386 Tel: +233 - 22 - 213705/6 Tel: +233 - 21- 673083/97

Fax: +233 - 21-238387 Fax: +233 - 22 - 213707 Fax: +233 - 21- 673108

Near GT University College, Bawjiase Road, Near Kwashieman Footbridge

Tesano, Accra Kasoa (Overhead)

Tel. : +233 - 21-237317 Tel: +233 - 21 - 862886/7 Kwashieman, Accra

Fax. : +233 - 21-237316 Fax: +233 - 27 - 7611988 Tel: +233 - 24 - 4341762/3

Tarzan House, Opp. Budumburam Refugee Camp, Near JB Plaza

Near Hotel De Horses, Budumburam. Along Christian Village - GIMPA Rd.

Kantamanto, Accra Tel: +233 - 21 - 910119 Accra

Tel: +233 - 21- 678243/5 Fax: +233 - 24 - 4332569 Tel: +233 - 24 - 4341764/5

Fax: +233 - 21- 678246

PassionateSolutions


ttb annual report 2008

Documents