GCB reviews court ruling in flotation case

Accra, May 8, GNA - Ghana Commercial Bank (GCB) says it is considering carefully a court ruling on its failed attempt to float new shares to shore up its stated capital in line with the requirements of the Bank of Ghana for a universal licence.

The Bank's resolve to float 165 million un-issued shares was stalled, following a case brought against GCB by a shareholder. "The Bank is considering carefully the ruling of the court to enable it to take appropriate course of action with regard to the flotation," Mr Lawrence Adu-Mante, Managing Director of the Bank, told journalists and brokers on the Facts Behind the Figures Programme of the Ghana Stock Exchange (GSE).

Meanwhile, he said, the Bank was taking advantage of the tax amnesty granted by the Ministry of Finance to transfer funds from income surplus to increase its stated capital by the end of June to comply with the Bank of Ghana's new requirement.

Mr Adu-Mante said GCB was adopting a two-prong approach of operational efficiency and good business positioning to stand the Bank in good stead to meet with the challenges being posed by the competitive banking environment.

A key component of this approach is the application of technology with the aim to enhance GCB's competitive position and service delivery. Currently about 100 branches have been put on the Wide Area Network. "We plan to complete the computerisation and networking of all branches and processes of the Bank by 2007," Mr Adu-Mante said. He said a service quality standard, which was critical for the Bank's success, was to be run throughout the entire branches, head office divisions and departments.

There were also moves to rationalise staff to ensure efficiency, improvement and attainment of the requisite human resource capabilities and competencies and the placement of staff to deliver quality service. Mr Adu-Mante said GCB would strengthen its hold of key businesses and through that attain its desired position in the banking industry. Financing of oil importation, refining and distribution, participation in cocoa syndication and financing of cocoa purchases are some of the key areas of interest to the Bank.

The Bank is also considering a renewed relationship with large and loyal retail customers as well as increasing its support to the small and medium scale enterprises.

Mr Adu-Mante said with declining interest rates and increased competition, the Bank would vigorously pursue the restructuring of assets and deposit liabilities as well as adoption of pricing options that would deliver the desired margins without adversely affecting business.

According to the Managing Director, the strategic efforts being applied had made positive impact on the operations of the Bank in the first three months.

For instance, the Bank mobilised additional 490 billion cedis or nine per cent of deposits compared to 71 billion cedis for the same period in 2005, raising the total deposit level to 5.2 trillion cedis. Similarly loans and advances increased during the quarter by 353 billion cedis compared to 182 billion cedis for the same period in 2005. Profit before tax for the first quarter of 2006 was 51 billion cedis, up by 11 per cent compared to the 46 billion cedis recorded for the same period in 2005.

Mr Adu-Mante, therefore, asked shareholders to retain the same level of confidence in the Bank as it was on course to deliver on their wishes.