GCB shareholders "cry" about low dividend
Accra, March 28, GNA - Shareholders at the 12th annual general meeting of Ghana Commercial Bank (GCB) on Tuesday registered a strong discontentment to a 400 cedis dividend declared and called for a major shake-up in the Bank to reduce the inefficiencies and wastes. They said they were not happy with the Bank's performance for the year 2005 because it had done very little to improve shareholder value as promised compared to other banks in the system.
The dividend, which amounted to 66 billion cedis, was slightly higher than the 2004 figure of 375 cedis per share amounting to 61.875 billion cedis.
Giving an overview of the Bank's operations last year, Mr Kwabena Gyima Osei-Bonsu, the Board Chairman, said the Bank's move to float 165 million un-issued shares to raise its stated capital, did not materialized because a shareholder took the Bank to court on the issue. The case according to him was still pending in court.
Mr Osei-Bonsu said in order to strengthen best management practices and good corporate governance, the Bank approved a new corporate plan spanning 2005 to 2007, which hinged on operational efficiency and business positioning.
The ultimate aim of the plan, he said, was to ensure that shareholder value was enhanced.
The Board Chairman said the year 2005 saw a prudent macroeconomic management coupled with resilience of the economy leading to moderate stability, but which resulted in a fall in interest rates. He said this could have affected the Bank's income had it not been the pragmatic measures employed by the Management.
Profit after tax stood at 129.025 billion cedis as against the previous year's level of 165.040 billion cedis.
On the Bank's outlook for 2006, Mr Osei-Bonsu said GCB would continue to pursue corporate policies to optimize shareholder's value and customer's satisfaction.
He said further emphasis would be put on rationalizing existing services to make them attractive and efficient through the application of improved technology.
The Board Chairman said a market oriented organization, segment customers and development of products based on customer needs as well as rationalization of branch network would be tackled.
Mr Lawrence Adu-Mante, the Managing Director of the Bank, described the year 2005 as very challenging for GCB and noted that the falling interest rates experienced led to dwindling margins. He said the Bank grappled with intense competition that characterized the banking industry at present adding, "despite these, the processes of the Bank continued to be modernized through reconfiguration of branches and increased usage of information technology".
Mr Adu-Mante said, even though, the Bank recorded a 21.9 per cent increase in loans and advances (from 2,474.5 billion cedis in 2004 to 3,018.2 billion cedis in 2005), profit before tax decreased slightly from 234.0 billion cedis in 2004 to 233.7 billion cedis in 2005. He said the shareholders funds rose from 725.7 billion cedis in 2005 from the previous figure of 602.3 billion cedis representing a rise of 20.4 per cent.
Total assets of the Bank rose to 5,890.2 billion cedis representing an increase of five per cent. Its total deposit grew from 4,265.7 billion cedis in 2004 to 4,729.9 billion cedis in 2005. Products to be introduced in the course of year by the Bank include inland money transfer for customers and non-customers and other internet banking products.
The shareholders unanimously voted for the Bank to transfer 100 billion cedis from its income surplus account to its stated capital account so as to take advantage of the tax amnesty granted by the Government.
The amount, which would not be liable for the payment of any tax, duties or fees in respect of such transfer under any enactment for the time being in force, would enable the Bank to comply with the Bank of Ghana's capitalisation requirement.