Ecobank Ghana defer dividends payment for 2018 to strengthen capital

Ecobank Ghana defer dividends payment for 2018 to strengthen capital
Source: Ghana | Ebenezer Sabutey | JoyBusiness
Date: 17-05-2019 Time: 06:05:47:pm

Ecobank Ghana says, meeting the Minimum Capital requirements is not the end of capital growth for the bank as it continues to be the leading financial services provider in the country.

To this end, despite an increase in profit for the year 2018, the bank has decided to hold on to dividends payment for shareholders.

At the Bank's Annual General Meeting in Accra, some shareholders expressed disappointment that they have been denied dividend for the past two years as well as the bank losing share price on the Ghana Stock Exchange.

However, Managing Director of the bank, Dan Sackey in a response disclosed that the bank is still in the process of building its reserve before declaring dividends.

He said, "Meeting the GH¢400 million capital requirements is not the end of the game but it is key that you maintain the appropriate capital levels to support the Business. If you look at Ecobank position on the market and balance sheet and revenue generation capacity, it's important that we maintain adequate capital.”

“We did that last year by moving income surplus to, first of all, meet the requirements and also to ensure that we have adequate buffers to support what we do. This year we will continue to build on those buffers to boost the operations and without adequate capital, we won't be able to make it," Mr Sackey added.

Growth

Ecobank Ghana closed the year with profit before tax of GH¢133 million amounting to an increase of 36 per cent as compared with the previous year. The growth is largely attributed to increased revenue, lower impairment charges and a moderate increase in the cost of operations.

Remittance revenue was GH¢57 million representing an 18 Percent year on year growth. Despite this growth, the bank decided to defer dividend payment to the near future.

Mr Sackey disclosed that the bank is still in the process of building its reserve before declaring dividends.

For the year 2018, 78 per cent of the bank's transactions were done on its digital platform.

Ecobank grew its deposit by 20 per cent as at the end of the year.