Benjamin Dzoboku, the Managing Director of Republic Bank Ghana Plc, has disclosed the bank’s desire to resume dividend payments next year, 2024 if the Central Bank reverses its earlier directive on the payment of dividend.
According to the Managing Director of Republic Bank Ghana Plc, the hope of the bank being able to resume dividend payments is premised on the possible repeal of the dividend payment suspension directive issued by the Bank of Ghana (BoG) last year following the adverse impact of the Domestic Debt Exchange Programme (DDEP) on the banking industry.
The MD while speaking at the Bank’s 32nd Annual General Meeting (AGM), said “Republic Bank made a lot of profit in 2022 and had it not been for the impact of the DDEP which affected our inability to pay dividends, we would have paid dividends to our shareholders. But we believe that in 2024 and 2025, possibly after the BoG has reversed the directive to suspend dividend payments, we would be able to pay dividends to shareholders”.
According to the MD, Republic Bank has a dividend pay-out ratio policy of 40% to 60% with the 60% going to shareholders.
Meanwhile, Republic Bank Ghana suffered a total comprehensive loss of GHS 22.69m following its participation in the DDEP mainly due to the GHS 241.61m net impairment loss on financial assets.
The Bank’s total comprehensive income for 2022 stood at GHS 147.29m, a 63.89% increase from the GHS 89.87m total comprehensive income recorded in 2022.
Accounting for the impact of the DDEP, Republic Bank’s total comprehensive loss of GHS 22.69m represents a -125.25% fall in net income or profit.
Despite the 2022 financial year being a challenging year as weak macroeconomic fundamentals affected the business operations of the bank, Mr Dzoboku noted that Republic Bank Ghana remains resolute as it continues to employ various tools, strategies and initiatives aimed at mitigating risks on the bank’s operations.
The MD noted that the bank will continue to leverage on opportunities in various sectors of the economy to ensure it continues to build and maintain resiliency and thrive in the face of adversity.
Resolutions passed at the 32nd AGM
A total of nine (9) resolutions including two (2) special resolutions were passed at the bank’s 32nd AGM.
Resolution one (1) to seven (7) saw the re-election of directors to the Company’s Board, the fixing of remuneration of Auditors for the year 2023 and the adoption of the Annual Report and Audited Financial Statements of the Bank.
The special resolutions included the deletion of paragraph 44(1) of the Bank’s constitution, which was replaced with “All dividend payments to members shall be through electronic payment means such as mobile money, bank transfers and other forms of payments as may be approved by the Securities and Exchange Commission.”
Provision For GHS 400m Exposure To Cocoa Bills
The Managing Director, Benjamin Dzoboku, disclosed that Republic Bank Ghana made adequate provisions for its GHS 400m exposure against cocoa bills for which processes to have the short-term debt securities restructured have been commenced by the Ghana Cocoa Board (COCOBOD).
Mr Dzoboku noted that the bank’s exposure to cocoa bills is small and would not significantly impact its ability to make profit for 2023. “We don’t have any exposure to dollar bonds but we do have exposure to cocoa bills to the tune of GHS 400m, it is a little amount that won’t affect our ability to make profit for this year,” he said.
The Ghana Cocoa Board (COCOBOD) has taken a significant step towards optimizing its funding structure by introducing a debt securities exchange programme, according to an official statement released on July 14, 2023.
The initiative aims to invite holders of COCOBOD’s short-term debt securities, known as Cocoa Bills, to voluntarily exchange them for longer-term debt securities with comparatively lower coupon rates.
Under the Exchange Programme, COCOBOD plans to issue longer-term bonds with an aggregate principal amount of approximately GHS 7.93 billion.