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Business News of Monday, 2 February 2009

Source: GNA

Management of Odotobri Rural Bank suspends payment of dividends

Jacobu-Ashanti, Feb. 2, GNA - Management of Odotobri Rural Bank at Jacobu-Ashanti has suspended payment of dividends to its shareholders to meet the minimum capital requirement of 150,000 Ghana cedis instituted by management of Bank of Ghana (BoG). Each shareholder was expected to be paid 59,068 Ghana cedis as dividend.

Mr J. Owusu-Boadi, Chairman of Board of Directors of the bank, addressing the Annual General Meeting of shareholders at Jacobu-Ashanti at the weekend, regretted about the inability of the bank to pay dividends to shareholders, backbone of the bank. He explained that BoG's circular on "Revised Regulations of Rural and Community Banks" stipulated that the new minimum requirement for rural banks is now set at 150,000 Ghana cedis and were required to grow their stated capital to that amount. "If we add up the proposed dividend of GH¢59,068 in the income statement to our current stated capital, we will get 157,013 Ghana cedis to enable us meet BoG's target".

Mr Owusu-Boadi called on the shareholders to co-operate with the board to enable the bank enjoy many facilities in fulfilment with BoG's minimum requirement. He announced that during the operational period ending December 31, 2007, the bank recorded a profit before tax of 314,811 Ghana cedis as against 133,841 Ghana cedis gained in 2006. Mr Owusu-Boadi noted that the achievement was due to prudent banking policies initiated by the board of directors and management. He said assets of the bank increased from 5.7 million Ghana cedis in 2006 to 7.7 million Ghana cedis in 2007 representing an increase of 35 per cent.

On investment in treasury bills, Mr Owusu-Boadi said it decreased by eight per cent from 1.6 million Ghana cedis in 2006 to 1.4 million Ghana cedis in 2007 whilst total deposits increased by 37 per cent from 4.4 million Ghana cedis in 2006 to six million Ghana cedis in 2007. "During the year under review, the bank granted 4.3 million Ghana cedis as loans as against 2.6 Ghana cedis for traders, other businesses and agriculture. Mr Owusu-Boadi said the bank granted 2,800 Ghana cedis scholarships to 36 brilliant but needy students within its catchment area to pursue various courses in the country's universities, polytechnics and senior high schools.