…with BoG’s special consent
Shareholders of Ecobank Ghana will receive 55 pesewas per share as dividend from the bank with respect to the 2020 financial year
This is a 100% increase over the 2019 dividend payment.
It follows approval by the Bank of Ghana for the increment and payment. The Bank of Ghana must give approval before any bank can declare and pay dividends because the centreal bank wants to ensure that the challenges arising out of the impact of COVID 19 does not deteriorate their financial solidity. Therefore only banks with strong profitability during the 2020 financial year, backed up by unimpeachable balance sheet strength will be allowed to pay dividends to shareholders this year.
Speaking to shareholders of the bank at a virtual Annual General meeting in Accra, Managing Director of Ecobank, Daniel Sackey explained that the regulator has approved the payment which is a total amount of GH¢177 million due to improvement in the financial soundness indicators of the bank, including reductions in its Non-Performing Loans.
“I can confirm that the regulator has approved the increment in our dividends payment taking into consideration factors like the non-performing loans, growth in capital adequacy for the next two to three years”
In responding to a question by some shareholders on the Bank of Ghana’s freeze in dividend payment, Dan Sackey answered “the bank has been able to satisfy the regulator (Bank of Ghana) by meeting the basic requirements as a bank and that is why we got the approval for an increment”
Ecobank Ghana in 2020 emerged the most profitable bank with a profit of GH¢584 million.
Customer deposits grew by 21%, from GH¢9.7 billion in 2019 to GH¢11.8 billion in 2020.
It ended 2020 with a Capital Adequacy Ratio of 19.5%, well above the minimum regulatory requirement of 13%.
However, the bank recorded a contraction in its loan book by 7%, attributed to the reduction in economic activities due to the covid-19 pandemic in 2020. Last year the bank focused on restructuring its existing loans, rather than booking new ones and this has eased the financial challenges of its borrowing customers, imposed by the adverse economic impacts of the coronavirus pandemic.
Interestingly though, the bank has recorded strong growth in its new Express Loans product which enables customers to obtain unsecured retail loans through their mobile phones. The product is offered in conjunction with MTN Ghana. So far the bank has given loans averaging GHc300 to more than 2.9 million customers, with over GHc3 billion lent to date. Encouragingly, the MD says that repayment rates are within the normal parameters for the bank’s loan portfolio as a whole.
As the leading digital bank in Ghana Ecobank is collaborating closely with financial technology companies (fintechs) to develop new digital banking products and services for customers. The bank offers them the opportunity to design products that fit in with its ecosystem and meet the identified needs of its customers.
Dan Sackey is sure that although as COVID -19 recedes in Ghana some degree of pre pandemic normalcy will be pursued, its staff working remotely from home and its customers accessing its products and services digitally rather than physically will remain at levels higher than before the pandemic struck.
By Toma Imirhe