Increase dividends – SSNIT urges Ecobank after receiving GH¢28.8m

The Director-General of the Social Security and National Insurance Trust (SSNIT), Dr John Ofori-Tenkorang, has urged Ecobank Bank to increase dividend payments to investors.

This is because the Trust largely relies on the returns from investments made in companies, including Ecobank, to meet its obligations.

Currently, the Trust’s investments in banks stood at GH¢1.76 billion as of December 2020, making it the second-largest shareholder, with 16.21% of total shares of Ecobank.

Therefore, the dividend from the bank would contribute immensely to paying its monthly pension to members.

The Director-General of SSNIT said this when the bank’s management presented a dividend of GH¢28.8 million for 2020 to the Trust in Accra on Wednesday, July 7.

Whilst commending Ecobank, Dr Ofori-Tenkorang said, “we wished the dividend was more because we have huge monthly pension payments we are obliged to make”.

“Currently, we are paying about GH¢250 million to pensioners monthly. We, therefore, anticipate higher returns for the current year considering the improvement in the economy,” he added.

Dr Ofori-Tenkorang said that the management of the Trust is committed to restructuring existing investments and investing in low risk but high yielding investment assets.

“Based on the sound policies adopted, we are confident that in the coming years, a lot more investee companies will be posting some very good returns,” he said.

Commenting on the presentation, the Deputy Director-General, Investments and Development at SSNIT, Kofi Osafo Maafo, lauded the bank for its strong performance.

According to him, all the bank’s key indicators showed a positive trend, including a solid capital adequacy ratio of 20%.

Dr John Ofori-Tenkorang (right) receiving the dividend cheque

The Managing Director of Ecobank Ghana, Daniel Sackey, said the bank had to pay the dividend through the sector regulator.

The Bank of Ghana (BoG) had directed that dividends should not be paid for the 2020 financial year.

The decision of the BoG was due to the COVID-19 pandemic and its possible impact on the balance sheets of banks.

He, however, noted that the bank received approval from its shareholders to pay dividends to its shareholders of which SSNIT was part.

Mr Sackey further commented that with SSNIT being the second-largest shareholder after Ecobank’s parent company, Ecobank Transnational Incorporated, it was proper that the bank render accounts to the investor on an annual basis.

Ecobank financial performance for 2020

The group’s profit after tax grew by 24% to GHC 550million by the end of 2020 compared to the same period in 2019.

An additional GHC 210.4million pushed total comprehensive income for the year to GHC 760.3million, bringing smiles to investors’ faces as earnings per share rose by 26% to 170 pesewas.

Revenue of the group increased by 16% to GHC 1.85billion compared to 2019.

Profit Before Tax and Deposits also went up by 22% and 21% respectively.

Total assets increased by 21% to GHC15.9billion, just as total liabilities by 18% to GHC 13.5 billion with a Return on Average Assets of 3.8%.

The capital adequacy ratio increased to 19.57%, demonstrating an increased ability to meet obligations using its assets and capital.

Non-performing loans increased slightly to 6.31% but way below the industry average.

Most companies are reeling under the COVID-19 pandemic affecting the payment of loans across the industry.

The bank ended the year with an increased liquidity ratio of 104.84%, also an improvement in the ability to pay its short-term debt obligations such as withdrawals.

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