UT shareholders authorise Board to raise GH¢ 50 million
Shareholders of UT Bank on Tuesday gave the board mandate to raise capital of up to GH¢50 million by way of either a right issue, or and private placement on terms and conditions that the board might consider beneficial to the bank and its shareholders.
The mandate also allows the board to provide specific rights to certain categories of investors as they may consider appropriate and in the best interest of the bank and its shareholders.
The authorisation was given at this year’s annual general meeting which is the first for the bank since the acquisition and merger with the then UT Bank.
Prince Kofi Amoabeng, Chief Executive Officer UT Bank, said the authorisation was important to enable the bank meet the Bank of Ghana capital requirement of GH¢60 million by 2012.
On the performance for 2010, the bank’s total income grew by 30 per cent on prior year, and the most significant increase was in the non-funded income which went up by 159 per cent.
Turnover on money transfer was also in excess of $13 million and non-funded income from fees and commission on Letter of Credit charges, gains in foreign currency transactions and money transfer were part of new business gains from having a banking license.
Prince Amoabeng expressed satisfaction with the performance of the team and the results, adding that the result reflected the underlying strength of the business and strategies to improve shareholder value.
He said the increase in operating expenses to GH¢27 million in 2010 was predominantly due to the acquisition of “UT Bank” and the costs of the expanded operations, branches increased from 16 to 26, staff from 400 to 600.
The bank’s cost to income ratio however, moved from 50 per cent to 58 per cent, he said, “and the coming years we would work hard to bring it below 50 per cent.”
UT Bank whose key strength is delivering lending to small and medium enterprises and quality auto loans had a loan book of GH¢315 million at the end of the year, with disbursement in excess of GH¢200 million.
The auto-loan portfolio grew steadily through strategic alliance with auto agencies and currently has a portfolio size in excess of GH¢18 million.
With the attainment of the universal banking license, corporate banking was added to UT Bank services offering making up GH¢71 million of loan book.
Mr Joseph Nsonamoah, Chairman of the Board, indicated that having delivered a resilient performance on its core products, the bank was well positioned for future earnings growth.
“This is hugely satisfying as the task of implementing one of the most complex integrations and corporate restructures in Ghanaian financial history has not affected our desire and ability to serve our customers,” he said.
UT Bank currently has 26 branches including microfinance unit and operate in seven regions, employing over 600 people.
“We have successfully addressed key strategic and operational challenges facing the organisation and re-affirm our commitment to continue to do so to the benefit of all stakeholders,” Mr Nsonamoah added.
The Bank proposed a dividend of 30 per cent of its profit for the year, or one pesewa per share, amounting to more than GH¢3.02 million.
Other resolutions passed at the meeting included an approval to transfer six million Ghana cedis from income surplus to stated capital and another authorisation for the bank to purchase its own shares.