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27.03.2009 Business & Finance

GCB pays GH¢15.9 million dividend

By gna
GCB pays GH¢15.9 million dividend

Ghana Commercial Bank (GCB) on Friday announced GH¢0.06 dividend per share amounting to GH¢15.9 million.

The figure represents 42 per cent of its after profit after tax for 2008, which stood at GH¢37.59 million.

Mr Kwabena Gyima Osei-Bonsu, outgoing Chairman of the GCB Board, who announced this at the Annual General Meeting (AGM) of the Bank said the Board deemed it fit for shareholders to take a share of their wealth.

“Cheques for the dividend will be issued to shareholders beginning from June 15, 2009,” he said.

He noted that the performance of the bank in 2008 was better than 2007 due to significant increase in loan portfolio, investment in new products, development of ICT to deliver services efficiently through centralisation, increase in interest rate and effective cost control.

Mr Osei-Bonsu said the Bank's profit after tax for 2008 was GH¢4.72 million higher than that of 2007 which stood at GH¢32.87 million, adding that profit before tax for 2008 was GH¢49.71 million compared to GH¢46.96 million cedis in 2007.

“We achieved a commensurate growth in shareholder equity; earning per share was GH¢0.142 compared to GH¢0.124 in the previous year,” he said.

Mr Osei-Bonsu noted that the performance of the Bank in 2008 was particularly commendable because the operating environment resulting from the global financial crisis was not favourable.

He said during the year budget deficit increased, the exchange rate worsened - the cedi depreciated against the dollar by 26 per cent - international finance inflows were less than expected, increasing pressure for foreign currency to pay for huge oil import bills.

Mr Osei-Bonsu said the Bank employed a mix of human capital, information technology and efficient processes to deliver excellent services to keep the bank above the global financial crisis, adding that the rights of issue introduced last year was successful due to effective management.

He assured shareholders that the Board was committed to increasing shareholder value, adding that the management would continue to implement the remaining aspects of the rights of issue between now and 2010.

Mr Lawrence Adu-Mante, Managing Director of the Bank, said in 2008 alone gross loans and advance rose significantly by 45.1 per cent to GH¢1,087 million in 2008 from the 2007 level of GH¢750.6 million.

“This increase was due to competitive pricing method adopted by the Bank and the small and medium scale enterprises advisory services being offered to existing and potential customers,” he said.

He said the increase, however, resulted in an increase in Loan Loss Provision from GH¢10.2 million in 2007 to GH16.7 million in 2008.

“Shareholder's funds rose from GH¢176.9 million in 2007 to GH¢207.7 million in 2008 indicating a significant growth of 17.4 per cent,” he said.

He, however, noted that the share price on the Ghana Stock Exchange fell by about 60 per cent due to the rush by shareholders who got on board through rights of issue to sell their shares at very cheap prices as a result of the credit crunch.

“We hope that with the huge dividends the share prices will rise gradually in 2009,” he said.

Mr Adu-Mante said total assets increased from GH¢1,154.7 million in 2007 to GH¢1,650.2 million in 2008, an increase of 42.9 per cent.

He said in 2008 the Bank opened 11 new branches bringing the total to 148 branches across the country as at December 31, 2008, adding that it would continue to invest in training, technologies and strategies to increase profits and benefits for shareholders.

Shareholders were also encouraged to access the depository account system being run by the GSE to ensure that all their shares in GCB and other equities were deposited in an account with the GSE.

Shareholders were full of praise for the outgoing board and management of the bank for their performance.