The board of directors of Sefwiman Rural Bank has recommended that sharehoders’ dividend be used to recapitalise the bank to enable it to meet the Bank of Ghana’s minimum capital requirement of GH¢300,000 for rural banks.
Even though the bank announced an after-tax profit of GH¢251,502.03 for 2013; an increase over the GH¢240,195.30 obtained in 2012, the board of directors did not recommend the payment of cash as dividends to shareholders.
Speaking at the eighth annual general meeting (AGM) of the bank held at Sefwi Dwinase, the Board Chairman, Mr Francis Aboagye-Otchere, said “we are recommending for your approval, a capitalisation issue of 50 pesewas per share.”
This arrangement, he said, “will result in the transfer of an amount of GH¢107,473.5 to the stated capital.”
The meeting coincided with the official opening of the Sefwi Dwinase branch of the bank.
The bank secured the approval of its shareholders to split its share price by five, in line with management measures to make the bank’s share attractive to investors and affordable to the ordinary Ghanaian.
Following the split, the bank’s shares, which were sold for GH¢1.25.00 each, have now been reduced to GH¢0.25 (25 Ghana pesewas) and consequently, all shareholders have been issued with additional four shares for each share owned.
In spite of the economic challenges in the previous year, Mr Aboagye-Otchere said the bank recorded a steady growth across all its targets for 2013, despite the stiff competition in the catchment area and the harsh domestic economic environment.
The board chairman also said the shareholders’ equity in the bank grew by 37.6 per cent from GH¢677, 930.90 in 2012 to GH¢932,802.18 in 2013 and the book value per share in the year under review was GH¢4.34; up by 3.33 per cent from the GH¢4.20 recorded in 2012.
Mr Aboagye-Otchere said as part of the bank’s development plans to make it more relevant to its customers, it had established a microfinance centre to undertake solely microfinance activities.
He also said that plans were advanced for the opening of another branch at Sefwi Boako, adding, “per our five-year strategic plan, we want to open a new agency or mobilisation centre each year to increase the bank’s outreach and bring the banking services closer to people, whilst mobilising more funds for investment.”