adb hopeful of listing on GSE

The Agricultural Development Bank (adb) says it is on course to list on the Ghana Stock Exchange (GSE) this year to enable it raise additional equity to deepen its operations.

The move, though yet to be endorsed by government which is the majority shareholder, will enable the bank to finance capital-intensive businesses in all sectors of the economy -- including the oil and gas sector.

“Our plans of going to the stock market for recapitalisation and expansion programmes this year is very much on course,” said Adam Sulley, Head of Marketing & Client Service of the bank told B&FT at an interview in Accra.

“There has been discussion for some time now, and there are still a lot of discussions with the Finance Minister in terms of reporting, structure, among others. A lot depends on the Minister now, but there is goodwill -- even from the Bank of Ghana which is very much willing,” he added.

adb prides itself on being a bank dedicated to financing agriculture, but concerns have been raised about whether its current structure and operations give the needed thrust to the agricultural sector, with many commentators asking for the bank to be repositioned to upscale its agriculture business.

Ghana’s agricultural sector employs approximately 42 percent of the working population, according to census data. The sector is often said to be growing below potential with farmers facing perennial problems such as the unavailability of modern equipment, erratic rainfall, and expensive credit.

Nana Soglo Alloh IV, chairman of the bank’s board of directors, stated that adb’s key plan is the injection of additional capital into its business through the planned public floatation.

The additional capital, he said, will be used to expand the bank’s business frontiers, open more branch locations, venture into new channels and make its banking products accessible to more Ghanaians.

Currently, the bank is in the initial stage of its follow-up strategic plan for the 2014-2016 period -- designed to ensure sustainable growth and profitability and build on the key successes achieved in the previous strategic plan that was completed in 2012.

“We are committed to leveraging our skills, resources and risk expertise to build an efficient policy-led agricultural-financing institution of choice and contribute to the building of a strong national economy,” the board chairman said.

Minister of Finance and Economic Planning, Seth Terkper, whose address was read on his behalf by his Deputy, Kweku Ricketts-Hagan, said: “The country’s medium-term objective and strategic direction is to expand opportunities for all and reinforce the foundation for socio-economic transformation in partnership with the private sector”.

He said the strategy of agricultural modernisation is pivotal, and government is working to harness all resources toward achievement of this objective.

“For this reason, an efficient credit delivery system to the sector remains one of the high points of government’s economic policy. Government will therefore implement measures that will enhance the role and efficiency of financial service providers in the agriculture sector.

“adb as an indigenous banking institution has contributed immensely to the government’s development agenda, especially its role as one of the closest partners of government in prosecution of the country’s agricultural development,” he said.

He commended the bank for its involvement in all national agricultural development programmes, projects and schemes undertaken by the government and various local and international donor organisations over the years.

“Since 2009, the bank has undertaken transformational restructuring with a view to repositioning itself in the face of the challenges of operating as a universal bank,” he said.

adb, which was set up in 1965 by Act 286, is wholly public-owned -- with government holding 52% of the shareholding while the remaining 48% is held by the Financial Investment Trust on behalf of the Bank of Ghana.

It provides a full range of banking products and services in retail, commercial, corporate and investment banking.

Despite its limited support, the bank continues to remain the number-one financier in the agricultural sector. In 2011, the bank’s total lending to the agricultural sector amounted to GH¢142million. It also made some new interventions in the agro-processing sub-sector and invested a total of GH¢84.5million.

In the same year, the bank transferred GH¢25million to its stated capital account, which increased its stated capital from GH¢50million to GH¢75million.

This enabled it to fully comply with the regulatory minimum capital requirement of GH¢60million ahead of the 31st December 2012 deadline given by the Bank of Ghana for full compliance by indigenous Ghanaian banks.