Ankobra bank in search of GH ¢80,000 for shareholders
The Ankobra West Rural Bank Limited is in a fix. This is because the fairly new bank which is competing with the big commercial banks in the Western Region is expected to raise GH¢ 80,000 through the sale of shares before it can pay dividend to its shareholders in future.
This is in accordance with a directive issued by the Bank of Ghana last month that existing rural and community banks are required to grow their stated capital by a minimum of GH 150,000.
Besides their inability to pay future dividend to shareholders, rural and community banks with stated capital below one hundred and fifty thousand new Ghana cedis would also not be allowed to open new branches or agencies until they attain the new capitalization requirement.
The increase in Stated Capital is designed to ensure that rural and community banks have enough capital to cushion or absorb losses as well as take on risk. The Statesman has learnt that paid up capital of the Ankobra West Rural Bank as at April this year woefully falls below the new Bank of Ghana's threshold.
According to the chairman of the board of directors, Mike Ezan, raising the eighty thousand new Ghana cedis is the bank's biggest challenge.
Presenting his report at the bank's 16th Annual General Meeting at Esiama in the Nzema East District over the weekend, Mr. Ezan appealed to the shareholders to buy more shares.
He noted that in accordance with section 50 of the Company's Code 1963 Act 179, shareholders who have greater shares also have greater voice in the decision making process.
Mr. Ezan disclosed that the Ankobra West Rural bank currently has about seven million shares available for purchase and that a share costs only one Ghana pesewa. The board chairman said the bank had embarked on a number of measures including radio announcements on local FM stations to entice members of the public purchase some of the floating shares.
He further disclosed that the bank which was worth only 116,266 new Ghana cedis as at December last year, has recommended payment of dividend totaling 6,166 new Ghana cedis to its shareholders.
Touching on the bank's performance last year, Mr. Ezan noted that despite the difficult conditions under which it operated, the Ankobra West rural bank was able to maintain a fair level of profit.
The bank, he said, made a profit before tax of 21,334 new Ghana cedis as against GH 20,421 cedis made in 2006, representing an increase of 4.4 percent. Total income generated by the bank also amounted to 108,313 new Ghana cedis as compared to the 86,542 in the previous year.
The bank, he said, posted an increase in its total assets from 854,670 new Ghana cedis in 2006 to 1,000,249 new Ghana cedis last year, representing an increase of 17.0 percent.
Mr. Ezan further disclosed that the bank's deposit liabilities went up from 455,055 new Ghana cedis in 2006 to 566,530 cedis last year whiles loans advanced to its customers also increased from 74,118 new Ghana cedis to 136,534 cedis , an increase of 84.2 percent. He said there was however a drop in its investment in government securities.
The deputy head in-charge of banking supervision department of Bank of Ghana, Franklin Belnye, intimated that the Bank of Ghana is seeking to give more autonomy to rural banks to manage their affairs.
He however pointed out that the increased autonomy comes with a lot of responsibility for the boards, management and staff of these banks.
Mr Belnye stressed that while the bank's policy would continue to support well-managed banks to continue to provide the needed services, ill-managed ones would be immediately shown the exit.
In an address read on his behalf, the Managing Director of ARB Apex Bank Eric Osei-Bonsu, urged rural banks to take advantage of and introduce new banking techniques like the E-zwich into their operations to claim a fair share of this market within their catchment areas.
The First Deputy Speaker of Parliament and Member of Parliament for the Ellembelle constituency, Freddy Blay, said the discovery of oil in the Western Region presented a brighter future for the Ankobra West Rural Bank as well as other banking institutions operating in the region.