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Row over GCB shares pop up at Annual General Meeting of the
bank
Accra, March 28, Ghanadot/GNA - The
Annual General Meeting (AGM) of Ghana Commercial Bank (GCB)
on Friday saw an argument between the Managing Director, Mr
Lawrence N. Adu-Mante and a shareholder over the correlation
between dividend per share and the number of shares.
Mr. Amoah Awuah, a former Deputy Minister of Finance in the
pre independence era and a GCB shareholder, started the
argument with an observation that the floatation of 100
million shares last year had led to an increase in the
number of the bank's floated shares to over 265 million and
this had “neutralised” gains for shareholders in terms of
dividend.
He further argued that since GCB had been in the banking
business for about 57 years, its shareholders should be
enjoying higher dividend than the “repetitive” 0.055 Ghana
cedis dividend per share the bank gives.
"I insist that there is a direct correlation between the
number of shares floated and the dividend that accrue to
shareholders every year. We need to cut down on the shares
floated to ensure that existing shareholders enjoy better
dividend," he said.
On his part, Mr. Adu-Mante also insisted that there was no
direct correlation between the number of shares or
shareholders and dividend, but rather between the value per
share and dividend.
He argued that if the value per share was high, dividend
were likely to be high as well.
Mr. Adu-Mante also noted that even though GCB had been in
existence for more than 50 years, shareholders had been with
the bank for only 12 years.
He also insisted that even though the number of shares had
increased, the bank maintained its dividend per share at
0.055 Ghana cedis, and as a result it gave away a quantum of
14.575 million Ghana cedis in dividends, representing 57.24
per cent of profit after tax (PAT), which stood at 25.462
million Ghana cedis.
Mr. Adu-Mante argued that the bank should rather be
commended for giving shareholders more than the mandatory 30
per cent of profit after tax in dividends.
"Moreover the 100 million shares floated through the rights
issue last year was over subscribed by a whopping 71.6 per
cent and yielded 60 million Ghana cedis, which was 15
million Ghana cedis more than the 45 million Ghana cedis
target," he said.
Contrary to Mr. Awuah's assertion that increase in floated
shares had adversely affected shareholders, Mr Adu-Mante
noted in his report on the review of the bank's operations
for 2007 that the Rights Issue undertaken last year was
largely responsible for a shareholders' fund increase from
39.2 million Ghana cedis in 2006 to a significant 76.1
million Ghana cedis in 2007, representing 82.8 per cent
increase.
In his report, Mr. K. G. Osei-Bonsu, Board Chairman,
declared a profit before tax of 39,543,580 million Ghana
cedis for 2007, which was 318,880 Ghana cedis more than the
previous year's and profit after tax of 25.462 million Ghana
cedis, representing a slight shortfall from the previous
year's 26.015 million Ghana cedis.
He said in 2007 the value of the total assets of the bank
rose to 1.145 billion Ghana cedis from 779.201 million Ghana
cedis in 2006, adding that total customer deposits rose from
634.572 million Ghana cedis in 2006 to 839.382 million Ghana
cedis.
With operating expenses of 99.8 million Ghana cedis, the
bank among other things increased its branches from 133 in
2006 to 136 last year, hooked all branches and 11 agencies
onto the Wide Area Network (WAN) and completed preparatory
and installation activities that would establish a
successful e-banking suite of products and services.
Mr. Osei-Bonsu said during the year under review, the bank
invested 760.567 million Ghana cedis into various sectors of
the economy and also made substantial donations to various
institutions and causes as contribution to the welfare of
the society.
He noted that 2007 marked the end of the bank's corporate
plan for 2005-2007 which saw the bank improving operational
efficiency and business positioning.
In the next corporate plan which is from 2008-2010 the Bank
would focus on delivery of quality service for customers and
creation of value for shareholders.
AGM approved the re-election of three retiring directors and
ratified the appointment, Mr Samuel Sarpong as the new
Deputy Managing Director (Operations) to replace Mr Roko
Frimpong, who was murdered at his Tema residence in June
last year.
The meeting also approved directors' emoluments of not more
than 850,000 Ghana cedis for nine directors of the bank.
GNA
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