Until recently, many of the banks in developing countries were state owned or locally established with varied mandates to focus on different sectors of the economy. Some of these state banks are bedevilled with peculiar set of challenges making some of them inefficient and unprofitable and in some instances insolvent. Financial performance analysis is aimed at keeping the banks in checks by highlighting low and high performance areas with the understanding that it will bring about improvement in performance. The PELARI (Profitability, Efficiency, Liquidity, Asset Quality, Risk Measures and Investor analyses) model was developed for analysis by the researchers which is similar to the CAMELS’ rating. Financial ratio analysis is employed in the analysis. Troubled signals models such as the Altman z-score for non-manufacturing companies and risk index were also used to measure risk. The Altman z-score generated for 2011 and 2012 showed a figure of less than 1.1 which put the bank in the distress zone category. It was evident from the analysis that ADB’s focus on agricultural financing is diminishing since a sector analysis of loans and advances indicates that the agriculture sector lost its first position to the services sector which recorded 38% compared with agriculture 29% in 2012. The bank’s liquidity showed a downward trend and slipped further down in 2010 confirming the Ghana Banking Survey (2011) assessment that the bank is illiquid.
Keywords: Analysis, Bank, Development, Financial Performance, Liquidity
