"ADB shareholders approve GHS 2 billion additional capital injection"

" ADB shareholders approve GHS 2 billion additional capital injection \r\n\r\n Shareholders \u00a0of the Agricultural Development Bank (ADB) PLC have granted approval for a record capital injection of Two Billion Ghana Cedis (GHS2 Billion) into the Bank to strengthen its operations.\r\n\r\nThe resolution was passed at an Extraordinary General Meeting (EGM) of the shareholders on Thursday, December 28, 2023, at the Accra Financial Centre. The resolution was in furtherance of the Bank\u2019s intention to raise additional capital to shore up its minimum paid-up capital which has been adversely affected by factors including the impact of the recent Domestic Debt Exchange Programme (DDEP) and challenged performance of the banking sector over the past two years, among others.\r\n\r\nThe resolution received an overwhelming\u00a0endorsement, without any opposition or abstention. The approval has now empowered the Bank to raise the additional equity capital of up to GHS2 billion through a renounceable rights issue on such terms (including the share price, the number of offer shares, allotment, and other modalities).\r\n\r\n Need for Additional Capital \r\n\r\nSpeaking at the EGM, the Board Chairman of the Bank, Daasebre Akuamoah Agyapong II, indicated that per Section 28(1) of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930), ADB is required to maintain the prescribed minimum paid-up capital (unimpaired by losses including accumulating losses, or other adjustments).\r\n\r\n\u201cThe current minimum paid-up capital prescribed by the Bank of Ghana for banks, including ADB, is GHS 400 million,\u201d he added.\r\n\r\nHowever, Daasebre Akuamoah Agyapong II noted that the recent adverse economic events (including the DDEP and impairments in the loan book of the Bank) unfavorably impacted the minimum paid-up capital of the Bank.\r\n \r\n Also read \u00a0\u00a0 Gold-for-Oil: 11 OMCs fail to reduce prices on first consignment \r\n \r\nThis, the Board Chairman said, birthed the Bank\u2019s intention to raise additional capital to shore up its minimum paid-up capital.\r\n\r\nDaasebre Akuamoah Agyapong II, highlighted the crucial role this capital infusion would play in advancing the mandate of the Bank in promoting socio-economic development through agriculture and more.\r\n\r\n Liquidity \r\n\r\nThe Bank\u2019s third-quarter results showed growth in Net Interest Income and Operating Income of GHS 397 million and GHS 621 million respectively.\r\n\r\nAlthough the Bank reported a decline in net profit at the end of Q3 2023 largely due to phase II of the DDEP and impairments, deposits from customers increased significantly to GHS 7.7 billion, from GHS 5.2 billion in 2022 Q3. This is mainly a result of the Bank\u2019s ability to achieve its deposit target, by mobilizing the GHS2.5 billion additional deposits from customers.\r\n\r\nThe Bank\u2019s total assets also grew significantly from GHS 7.1 billion in Q3 2022, to GHS 9.3 billion in Q3 2023, indicating a substantial asset increase or growth of GHS 2.2 billion.\r\n\r\nADB\u2019s liabilities also saw significant growth to GHS 8.6 billion in Q3 2023, compared to GHS 6.1 billion in Q3 2022.\r\n\r\n Outlook of the Bank, following the capital injection \r\n\r\nThe Bank\u2019s shareholders overwhelmingly voted in favour of all the resolutions tabled at the EGM, indicating their enthusiastic willingness to recapitalize the Bank to enable it continue to play its strategic role in agricultural development in Ghana.\r\n\r\nIn his remarks following the EGM, the Managing Director of the Bank, Alhaji Alhassan Yakubu-Tali, expressed gratitude for the resounding vote of confidence from the shareholders, adding that the additional capital will undoubtedly significantly enhance the overall operations of ADB.\r\n \r\n Also read \u00a0\u00a0 BoG urged to impose 5% ceiling on forex bureau rates to stem speculation \r\n \r\n\u201cThe additional capital injection will provide solidity and more comfort to our customers, investors, and the general public. For this gesture, I want to say a big thank you to our shareholders for the significant milestone chalked,\u201d he said.\r\n\r\nAlhaji Alhassan Yakubu-Tali added that the injunction of the additional capital would not only fortify the Bank\u2019s financial strength but also position it strategically to extend its continuous support to the agricultural sector and other critical areas of operations.\r\n\r\nOther resolutions, including the approval of the appointment of a new external auditor for ADB, were also overwhelmingly passed in line with due process.\r\n\r\nThe Agricultural Development Bank PLC is listed on the Ghana Stock Exchange, with majority of its shares being owned by the government. The Bank also has a sizeable proportion of private institutional and retail shareholders."

"ADB shareholders approve GHS 2 billion additional capital injection"

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