11 banks given the nod to pay dividends to shareholders by the Central Bank.
Eleven (11) banks in the country have been given formal approval by the Central Bank to pay dividends to shareholders for the 2020 and 2021 financial years.
The Bank of Ghana following the adverse effects of the pandemic on the economy introduced some regulatory measures that included financial institutions meeting certain key requirements before they could pay dividends to shareholders.
The requirements included proof of Capital Adequacy Ratio of 13 percent, cash reserve ratio of 10 percent, and non-performing loans (NPL) ratio of below industry average.
Adding the BoG’s stress test results on banks must also show that “the bank will maintain sufficient capital buffers after payment of dividends.”
The regulatory measures among others were to help prevent any pressure on the cedi and the economy as some of these payments were to go to investors outside the country.
Read: Naira falls at official market despite 44.3% increase in dollar supply
Speaking at the UPSA Law School Quarterly Banking Roundtable webinar, Deputy Head of Banking Supervision at the Bank of Ghana, Ismail Adam noted the decision by the Central Bank is to build robustness in banks, post covid-19.
“The idea is to make the institutions [banks] more robust and resilient such that they wouldn’t suffer because of the pandemic [Covid-19]. So one of the main things we did was to say that we are putting a hold on payment of dividend so that we build enough capital to withstand the shocks that will emanate from the pandemic.”
“But it was not cast in stone. We also said that if you [banks] are meeting certain requirements as we said you will be allowed to pay dividends. So as we speak, 23 banks that we have, I think 11 of them which is almost 50% we have given approval to them to pay some dividend”, he pointed out.
“From our interaction with the board, the issue came up and yesterday I think I made that point somewhere, some [banks] were even threatening to take us to court for infringing on their rights under the Companies Act”, he further stated.
Ecobank Ghana, GCB Bank and CAL Bank are some of the banks that have received approval from the Central Bank and already paid dividends to shareholders.
