Ecobank Ghana on course to meet new minimum capital by June

Accra, -Shareholders of Ecobank Ghana Limited have authorised the Bank to increase its stated capital from GH 226 million to GH 416.64 million, through a transfer of GH 190 million from the Bank’s income surplus account.

The move is in compliance with the Bank of Ghana’s directive to all banks in the country to increase their minimum stated capital to GH 400 million by the end of December, 2018.

Speaking at the Bank’s 2017 Annual General Meeting (AGM) held in Accra on Friday, Mr Terence Ronald Darko, the Chairman of the Board of Directors of Ecobank Ghana, said because of the need to capitalise the income surplus to meet the new minimum capital requirements, the Bank was unable to pay dividend for 2017.

However, he said, the bank would be issuing bonus shares of one share for every ten held, which in addition to the capital gains made on the bank’s stocks would be a big boost for shareholders.

The Board, working closely with the executive management team, is confident that the strategy currently being implemented will underpin the long-term growth of your company should lead to the resumption of cash dividend payment in the future, Mr Darko said.

Mr Darko said although 2017 was a difficult one for the banking industry due to the adverse macro-economic environment, characterised by declining yields on financial instruments, high levels of non-performing loans and increased competition for deposits, the bank was able to overcome the challenges and remains profitable.

Ecobank recorded a revenue of G.1 billion, down seven per cent from 2016, keeping its market leadership in revenue terms.

The slight drop in revenue was attributed to declining interest rate and the one-off gains from de-recognition of financial assets amortised in 2016, which were not present in 2017.

The bank made a profit before tax of one-off gains from de-recognition of financial assets amortised GH358 million compared to GH463 million for the previous year.

Earnings per share of GH 0.87, a decline of 22 per cent compared with G.12 in 2016 while return on total shareholders’ equity was 25 per cent in 2017 down from 35 per cent the prior year.

Our balance sheet is healthy, with total capital adequacy ratio of 13.76 per cent, which is above the regulatory threshold of 10 per cent, he said.

Going forward, we expect a boost in business confidence as the declining interest rate regime translates into lower cost of production and increased productivity for our clients, he said.

Mr Dan Sackey, the Managing Director Ecobank Ghana, said declining yields coupled with lower government borrowing as well as delayed payments from the energy sector and state owned enterprises had a negative impact on financial performance.

He said amidst the challenges the bank was able to further grow its balance sheet and customer deposits by over 20 percent.

Despite recording a slight dip in profits, the bank also achieved a three per cent return on assets and 25 per cent return on equity demonstrating how efficiently the bank was managed for the period, Mr Sackey said.

Mr Sackey said the bank’s digitization drive and adoption of mobile technologies had seen a tremendous success with more than 895,000 Ghanaians on board the mobile application.

Source: Ghana News Agency