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Business News of Tuesday, 28 May 2019
Source: Graphic.com.gh
2019-05-28
Dan Sackey, Managing Director, Ecobank
Ecobank Ghana has deferred the payment of its 2018 dividends to shareholders to future growth in a bid to build its reserves after meeting the GH ¢ 400 million minimum capital requirement.
The bank recorded a profit after tax of $ 339,968 million, amounting to a 36 percent increase over the previous year, the bank said.
The Board Chairman of Ecobank Ghana, Mr Terence Darko, said at the Annual General Meeting (AGM) in Accra that a result, Ecobank Ghana was unable to pay dividends for 2018.
In 2017, the bank converted to cash dividends into bonus shares, which raised the stake of the shareholders in the business, but the board has for 2018 deferred dividend payments to future growth prospects.
The chairman said they would like to make money, but there would be no cash dividends for shareholders.
Though many shareholders were not happy with the non-payment of dividends, they were hopeful that the bank was on a growth path.
Mr Darko noted that because of the ¢ 400 million minimum capital requirement, the bank's stated capital now stands at $ 1.32 billion, making it one of the best capitalized banks in the industry.
In 2018, Ecobank Ghana posted a growth of $ 1.3 billion, a 26 per cent of revenue growth, and a successful execution of its cost containment strategies.
Customer deposits went up by 16% and reached 7.6 billion on the back of the product, increased customer confidence in the brand and enhanced customer engagement through its supportive digital channels.
Loan book
Ecobank Ghana is also the largest loan book, recording GH ¢ 4.1 billion in loans that were strategically advanced with stringent recollection measures in place to ensure shareholder value.
The Managing Director of the Bank, Mr. Dan Sackey, was a media briefing after the AGM said the bank was still in the process of building its reserve before declaring dividends.
He said, "Meeting the GH ¢ 400 million capital requirement is not the end of the game but it is key that you maintain the appropriate capital levels to support the business.
If you look at Ecobank's position on the market and balance sheet capacity, it's important that we maintain adequate capital. "
"We did that last year by moving income over to, first of all, meeting the requirements and also ensuring that we have adequate buffers to support what we do. This year we will continue to build on these opportunities and we will not be able to make it, "Mr Sackey added.
He, therefore, badured them that the future looked bright for the bank so they could rest badured that dividends would kick in soon.
"We are positive that we will return to the next," he said, but he did not say exactly when.
Growth
Remittance revenue was GH ¢ 57 million, representing an 18 per cent year-on-year growth.
Mr Sackey disclosed that the bank was still in the process of building its reserve before declaring dividends.
For the year 2018, 78 percent of the bank's transactions were done on its digital platform. Ecobank grew its deposits by 20 percent of the end of 2018
"Customer confidence in the reliability and the 24/7 availability of the digital platform are more likely to grow because they believe that they are growing in the world." he said.
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