UT Bank rolls out strategies for 2014

ut-logoAfter a poor performance in terms of profitability in 2013, UT Bank, has evolved a number of measures to return the bank to profit ways this year.

These include restructuring of the bank’s operations; ensuring an increase in its customer deposit mix while adopting what it described as a massive loan recovery approach.

The Deputy Managing Director of UT Bank Limited, Mrs Pearl Essua-Mensah, dropped the hint in an interview with the GRAPHIC BUSINESS after the bank’s Annual General Meeting on April 17 in Accra.

The bank, which is noted for offering fast loans to many businesses in the country, recorded a profit before tax of GH¢13million, representing a decline of 48 per cent compared to the 2012 profit of GH¢27million.

According to her “2013 was a challenging year for us, but that notwithstanding, we are very optimistic about 2014.”

Economic fundamentals remained challenging in 2013 characterised by rising inflation, high interest rates on government securities and the sharp decline in the value of the local currency (Cedi).

All these external factors, she noted had a far reaching impact on the cost of doing business, particularly in the Small and Medium Enterprises (SME) sector.

“The SME market is our focus, and since the SMEs were adversely affected by the tough economic conditions, it affected us,” she stressed adding that the bank would position itself better to absorb the shocks the economic conditions might bring this year”

The Chief Executive Officer of the bank, Mr Prince Kofi Amoabeng, in a separate interview said the 2013 financial performance per their standards was unsatisfactory and it will, therefore, serve as a wakeup call to management to improve the fortunes of the bank this year.

“It is not a typical UT Bank results, but we cannot make too many excuses for it,” he admitted.

Meanwhile, shareholders at the meeting approved the resolution for the bank to raise GH¢100 million through a Rights Issue and or Private Placement to shore up its capital base.

Financial performance

The banks total assets grew by 35 per cent from GH¢986million to GH¢1.34 billion while loans and advances to customers also increased to GH¢917million from GH¢680 million in 2014.

Total shareholder’s fund increased marginally from GH¢128million in 2012 to GH¢129million in 2013. Revenue however increased to GH¢188million from GH¢134million in 2012.

As a result of the loss in profit for the year under review, the bank failed to declare a dividend for 2013.

Shareholders disappointed

At the AGM, shareholders expressed dissatisfaction at their bank’s performance in 2013.

Mr Joseph Abekah Biney, a popular shareholder in the country, said looking at the current economic conditions, the bank should have paid dividend to shareholders to make them happy.

Another shareholder, Mr J.B. Annan, used the occasion to urge local banks to put in measures to grow just like their foreign competitors who are currently doing well.

Almost all the other multinational banks in the country, including Standard Chartered Bank, Barclays Bank, Guarantee Trust Bank, Ecobank, Ghana Commercial Bank, all recorded sterling performances in spite of the many economic challenges as alluded to by UT Bank.

The issue brings to question why UT Bank returned a loss at a time when all its competitors were returning huge profits when they also operated within the same economic environment?

Mr Edward Deyla, who did not mince words about the poor performance of the bank, said there is the need for management to sit up and do better to increase shareholder value.

Despite the concerns raised, shareholders gave their approval for the adoption of a number of resolutions at the meeting.

-graphic online

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