ECOBANK lists on the GSE

Accra, May 15, GNA - Ecobank Ghana Limited on Wednesday listed on the Ghana Stock Exchange (GSE) with an initial offer of 8.275 million ordinary shares.

The offer, which opened on May 15, will last till June 2. It will trade at 11,000 cedis per share with no par value to the bank and is expected to accrue an amount of 91.025 billion cedis. Mr Samuel Ashitey Adjei, Managing Director, Ecobank (Ghana) Limited, said it was an exciting moment to be listed on the GSE, as the bank was one of the pioneer institutions in the creation of the Exchange.

He described the move as a landmark in the history of the bank since the public was being made part of its success story. Mr Ashitey said in its relatively short life as a bank, ECOBANK had won more domestic recognition than most of its much older competitors. He noted that the bank's financial performance had been impressive over the years. For instance, the balance sheet size had grown by 125 per cent between 2002 and 2005 compared to the industry's growth of 91 per cent over the same period, he said.

"Our 2006 first quarter results show a 24 per cent increase in profit before tax over the 2005 first quarter with total assets and deposits recording an impressive 38 per cent 34 per cent growth respectively."

Mr Ashitey said the bank was seeking to raise money to support its expansion and product development initiatives.

Mr Emmanuel Asiedu-Mante, First Deputy Governor of the Bank of Ghana, observed that the banking system generally remained competitively stable, sound and profitable even as banks strived to manage the transition into low inflation and low interest rate environment. "The quality of industry assets has also remained satisfactory with a non-performing assets ratio of 12.3 per cent at the end of March 2006," he added.

He noted that in terms of capital adequacy, the banking industry remained well capitalized with a ratio of nearly 16 per cent as at the end of March 2006 even as the banks strived to achieve the 70 billion minimum capital requirement by the end of 2006.

Mr Asiedu-Mante noted that the industry had experienced an increased competition and pressure on margins in recent times. This was attributable to factors such as the entry of new banks, the decline in the rate on government securities and the emergence of new financial products and services across the financial services industry, he said.

Thus, to survive the current tide, banks have to be more innovative and explore ways of attracting lower cost of financing their programmes in order to maintain their competitive edge.

He commended Ecobank for listing on the stock market and said it had significant advantage for the bank and the economy. "For the Bank, the availability of long term funds for the future expansion and growth is enhanced as well as rights issues may be used to secure further equity if the need arises."

Mr Asiedu-Mante stressed the need to promote convergence and the development of the entire financial services industry in order to exploit the full potential for effective financial intermediation and sustained growth.

"The removal of changes in the regulatory ratios and the removal of restrictions on the portfolio investment of the banks are meant to broaden the scope for cost-effective allocation of the investible funds in support for the industry."

Togbe Afede XIV, Chief Executive Officer of African Strategic Security, one of the two lead managers, said by inviting wider participation in its capital by investors the bank was further giving expression to dreams of the founding fathers of ECOWAS to create a unique world class multinational banking institution. Ecobank if the second lead manager.

He noted that the bank, which started 17 years back with about three million dollars, was now worth about 183 million dollars.