Ecobank shareholders ratify resolution to increase stated capital

Accra, March 27, GNA - Shareholders of Ecobank Ghana on Thursday passed a special resolution authorizing the directors to increase the stated capital of the bank to 100 million Ghana cedis to position it to meet the new minimum capital requirements set by the Bank of Ghana. This is to be done either by transfer of such sum from income surplus to stated capital and or by raising additional capital. The Central Bank early this year announced a new minimum capital requirement for obtaining a universal banking licence at GH¢60 million.

Existing banks are required to attain the minimum capitalization of GH¢60 million by December 31 2009. However, Ghanaian-owned banks with local majority share ownership will have to attain a capitalization of at least GH¢25 million by the end of 2010 and GH¢60 million by 2012. Mr. Tei Mensa Mante, Board Chairman, told the Annual General Meeting of shareholders that the move to shore up the stated capital was necessary to stand the bank in readiness for future challenges in the competitive banking environment. He said the directors would consider various options, saying that right issue was likely.

On the financial performance in 2007, Mr Mante said the Bank showed great resilience in the midst of the heightening competition, growing its asset size by 54 per cent from 432 million GH Cedis to 665 Million Ghana Cedis.

The growth in assets was funded by a 30 per cent increase in deposits from 336 million GH cedis to 438 million GH cedis. Mr. Mante said the bank also grew its revenue lines while effectively controlling its costs. Net interest income was up by 22 per cent from 31.7 million GH cedis to 38.6 million GH cedis, while Fee and Commission went up by 38 per cent.

Operating cost increased by 34 per cent in view of expansion programmes and product deliveries in 2007. Consequently, the bank's net profit rose to 19.4 million GH cedis last year compared to 16.5 million GH cedis in 2006. "Such a strong profitability performance for a rapidly expanding bank in a declining margin competitive industry underscores commitment to growing superior returns for our valued shareholders," he said. Mr Mante said the bank had been alive to its social responsibility providing funding support to state and private initiatives. ECOBANK last year opened 11 branches across the country and expanded its outreach through increasing the number of its ATMs to 84, made up of 56 EBG-owned ATMs and 28 set up in collaboration with Transol.

Mr Samuel Ashietey Adjei, Managing Director, said the bank would seek to consolidate its expansion programme and develop tailor made products for the various segments of the market. "Our business fundamentals remain strong and coupled with our innovative approach to banking we will ensure that we maintain our competitive edge in the banking industry," he said. In another development shareholders resolved to ratify the increase in the authorized shares of the company to 500 million. They also approved the proposed dividend payment of 0.083 GH cedis, representing a payment ratio of 90 per cent of profit after tax. 28 March 08