GCB Bank is to move 400 million cedis from its income surplus to help it meet the new minimum capital requirement set by the Bank of Ghana.
As a result, the bank should achieve capital of 500 million cedis.
Commercial banks have till December 2018 to meet the minimum capital requirement of 400 million cedis.
The Board Chairman of GCB Bank, Jude Arthur at the bank’s AGM on Friday, July 6, 2018 said the move should solidify GCB Bank’s position as a leader within the banking industry.
“We already have those funds in our income surplus and therefore what we are doing is to transfer from income surplus and then to stated capital all within our capital means. So we are not raising it as if we are raising it externally,” he told Citi Business News in an interview.
Commercial banks race against December 31st deadline
The commercial banks have resorted to various means to meet the requirement as failure could lead to losing one’s license.
While some have tapped into the stated capital for their increase financial strength, others have found solace in the stock market for extra funds from investors.
This has mainly been through Rights to Issue where existing shareholders have been appealed upon to re-inject fresh capital into the operations of the banks.
GCB Bank’s profits drop in 2017
For 2017, GCB Bank’s profits dropped by 29 percent.
The figure reduced from 467 million cedis to 332 million cedis between 2016 and 2017.
This the Bank attributed to the increase in other operating expenses and charges on unpaid loans.
This also followed the absorption of defunct UT and Capital banks in August 2017.
GCB only bank to pay dividends
Meanwhile the bank paid dividends of 10 pesewas per share for shareholders for 2017.
This amounted to some 26.5 million cedis.
It is worth noting that GCB Bank is the only listed bank that paid dividends to shareholders for 2017.
Majority of the banks cited the recapitalization plans as basis for their inability to pay any dividends.
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By: Pius Amihere Eduku/citibusinessnews.com/Ghana