GCB declares dividend for 2017 despite tough financial year

GCB declares dividend for 2017 despite tough financial year
Source: Ghana | Philip Nanfuri | JoyBusiness
Date: 06-07-2018 Time: 06:07:37:pm

GCB Bank Ltd. has sought the approval of shareholders to declare a dividend of 10 pesewas per share for the financial year 2017. 

This was made known at the bank’s 24th Annual General Meeting held in Accra on Friday. 

The declaration of dividend comes even though the bank saw a dip in its profit before tax (PBT) from GH¢467 million in 2016 to GH¢332 million in 2017, a 29% drop.

The dividend of 10 pesewas per share would see a total payout of GH¢26.5million to shareholders. 

This is, however, a drop from the 2016 figure of GHC 100.7 million at 38 pesewas per share. The dividends are payable on the 30th of July, 2018.

The Chairman of GCB, Jude Arthur in his remarks acknowledged the drop in the dividends paid to shareholders and explained the reasons why: “this is a far cry from the dividend trend of previous years, but you will no doubt agree that the challenges of the year and the need to increase our stated capital underpin this decision.”

He added, “It may be worth noting that notwithstanding the challenges, we are the only listed bank on the Ghana Stock Exchange to pay dividends to shareholders for 2017.”

Minimum Capital Requirement

One of the special resolutions of the AGM was to seek shareholder approval for an amount of GH¢400 million to be transferred from the company’s income surplus to stated capital in accordance with Section 66 (1) of the Companies Act, 1963 Act (179).

Shareholders backed this and thus the bank can go ahead to transfer GH¢400 million to its current stated capital of GH¢100 million which will see its stated capital increase to GH¢500 million, well beyond the Bank of Ghana’s minimum capital requirement of GH¢400 million, which universal banks operating in the country must meet by December 2018.  

Mr Arthur touted the bank’s ability to meet this ahead of schedule, as he described the bank as one with sufficient resources.
Some shareholders, however, called for more dividends going forward as witnessed in earlier financial years. 

Future of the bank

The Chairman in his remarks also disclosed the bank has plans of expanding beyond the shores of Ghana, targeting specific areas or niche markets and leveraging on technology to grow the bottom line of the bank.

Mr Arthur said, “As we seek to expand our frontiers to tap the profit pools of markets in Africa, Europe and North America and the far east, and as we seek to diversify into investment banking and create strategic alliances with partners we should be mindful of the fact that the winners.

He added, “As we stated earlier will be those who are able to use appropriate technology platforms to bring the profit pools outside their new markets effectively into theirs and create a defensible market niche.”

 

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