EDRB shareholders question BoG directive on payment of dividends

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Shareholders at the annual general meeting of Enyan Denkyira Rural Bank (EDRB) Limited have questioned the decision of Bank of Ghana (BoG) to community and rural banks not to pay dividends for the year ending 2019.

In April this year, the BoG gave notice to banks in the country not to pay dividends to shareholders for the 2019 and 2020 financial years because of the effects of the COVID-19 pandemic. 

Going by the BoG’s decision, the EDRB refused to declare dividends for its shareholders for the year ending 2019.

 At the meeting held last Saturday at Ajumako Owane the shareholders raised issues about the decision and asked whether officials of the BoG who took that decision thought through it with regards to its implications for the shareholders.

They also asked if those officials thought of not receiving certain allowances due them.

In the circumstances,  the shareholders vehemently kicked against increment in allowances for the members of the Board of Directors of the rural bank.

Later in an interview with some of the shareholders, they were unanimous that “in spite of COVID-19, the bank declared profit, so we don’t understand why we should not be paid dividend but the directors should have their allowances increased.”

One of the shareholders, Mr Ebo Prah, who broached the discussion on the dividend, said in the interview that “the profit made for 2019 is a little bit higher than that of 2018, that is GH¢412,107 against GH¢400,190.” 

“Why can’t they pay the same GH¢80,000 paid as dividend for 2018?”

Meanwhile the profit of the Enyan Denkyira Rural Bank in the Ajumako-Enyan Essiam District of the Central Region in 2019 increased to GH¢412, 107 from GH¢400, 190 in 2018.

This represents a 2.98 per cent increase over the figure recorded in 2019.

Operating income increased to GH¢3.465 million from GH¢3.170 million in 2018, representing a growth of 9.2 per cent.

In addition, total assets of the bank increased from GH¢14, 000,242 in 2018 to GH¢17, 190,140 in 2019, representing an increase of 22.8 per cent.

The Chairman of Enyan Denkyira Rural Bank, Dr William Panford Bray attributed the modest growth in profit to the challenging economic environment.

Concerning dividend, he said the bank’s performance was better, yet “the regulators have, however, suspended the declaration and payment of dividends to shareholders for the financial 2019 and 2020 as a result of the impact of the COVID-19 to enable the banks to absorb any potential operating losses.

“The Board is thus constrained from recommending declaring dividends until this suspension are waived by the regulators.”

FROM KWEKU GYASI ESSEL, AJUMAKO ONWANE

Source: ghanaiantimes