Standard Chartered Bank Ghana Limited will not be paying a dividend to ordinary shareholders for the 2017 financial year.
This follows plans by the bank to move funds in its income surplus account to the stated capital account to be able to recapitalise to GH₵400 million.
The plan is to enable the bank to meet the Bank of Ghana's directive to banks to recapitalise to GH₵400 million by December this year.
The directive required banks to recapitalise through three options - a fresh capital injection, recapitalisation through income surplus or a combination of the two.
StanChart's Board Chairman, Dr Ishmael Yamson, told shareholders at an annual general meeting Thursday that after various considerations, the bank's Board had decided that "the best option is to use our income surplus standing in our books as at 2017 to raise this new capital requirement.
"Consequently, the board shall not recommend the payment of dividend on ordinary shares in 2017," he added. The bank's stated capital was GH₵86 million as of December 2017. The income surplus account held in excess of GH₵251.3 million as of the same period.
The bank's CEO, Ms Mansa Nettey, also said in her statement to shareholders that the decision to recapitalise through income surplus was "the most efficient option."
Meanwhile, the bank's earnings per share rose by 27 per cent from GHS1.92 to GH₵2.44 on the bank of strong pre-tax profit.
Profit before tax rose by 22 per cent to GH₵422.3 million.
Operating income was up nine per cent to GH₵676.8 million. Return on equity, however, declined to 32.3 per cent from 34 per cent.
Credit: Graphic online