Page 19 - Agib Bank Ltd Annual Report and IFRS Financial statements 2020

The deficit in the goods account is estimated to have widened to US$512.71 million (29.00 % of GDP) in
December 2020 from a deficit of US$379.01 million (21.27% of GDP) in the corresponding period in 2019.
The continued deterioration of the deficit in the goods account mirrors import expenses for Covid-19 related
medical materials and decline in exports.

The services account balance deteriorated to a deficit of US$4.78 million or by 104.76% during the review
period, from a surplus of US$100.33 million a year ago. The deterioration can be attributed to a decrease in
personal travels associated with the collapse in the tourism sector due to the pandemic.

DOMESTIC MARKET DEVELOPMENTS

Volume of transactions in the foreign exchange market declined to US$2.17 billion as at end December 2020
compared to US$2.20 billion in the corresponding period of 2019. Both purchases and sales indicating supply
and demand of foreign currency, declined in the year to end December 2020. Purchases fell by 2.2 % to
US$1.07 billion while sales dropped marginally by 0.05 % to US$1.01 billion.

The exchange rate came under pressure during the year due to supply constraints associated with the
COVID-19 Pandemic and the slowdown of remittances in the last quarter of 2020, resulting to a weakened
Dalasi against the three major international currencies. Year-on-year the Dalasi depreciated against the Euro,
Pound Sterling and US Dollar by 7.3 %, 1.5 % and 1.1 %, respectively.

BANKING SECTOR

The banking sector remains fundamentally sound, well capitalized, liquid and very profitable. The risk
weighted capital adequacy ratio for the industry averaged 32.6% higher than the statutory requirement of
10%, increased by 1.2% points in December 2020. Total assets of the sector increased by 3.5% to D58.8billion
in December. Total loans contracted marginally by 3% to D335.73. However, the non-performing loans ratio
increased to 6.8% compared to 4.6% a year ago.

All the banks are adequately capitalized with liquidity ratio of the industry at 94.4% in December 2020, 2.8 %
higher than the 2019 ratio and well above the 30% statutory requirement.

FINANCIAL PERFORMANCE OF AGIB BANK LTD

The bank was able to deliver an improved year-end financial performance despite the fact the bank operated
under extremely difficult environment in 2020. Revenue grew by 36% to D191.7 million whilst profit before
tax increased by 269% to D59.1 million from D16.0 million in 2019. Total operating expenses has increased
by 6% from D126 million to D133 million in December 2020. Despite the increase, cost to income ratio has
decreased by 26% from 88.40% to 65.97% because revenue growth outstripped the rate of increase in costs.
Management will continue to push for increased revenue while managing recurring expenses.

Loans have also increased by 42% to D1.16 billion. Deposit also grew by 55% to D2.5 billion whilst total
assets grew by 42% to D2.9 billion. Earnings per share increased to D1.69 per share from D0.60 form the
previous year. Return on assets increased to 1.48% from 0.74% in 2019 and return on equity also grew to
17.53% from 5.31%.

Annual Report and IFRS Financial Statements for the year ended 31 December 2020 18