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Finance Minister Unveils Plans to Reduce Dependence on T-Bills Amid Limited Borrowing Options
Business & Economy

Finance Minister Unveils Plans to Reduce Dependence on T-Bills Amid Limited Borrowing Options

Major Overhaul for SOEs as GSE, SIGA Work to List Viable State Entities on Stock Exchange by End of 2025
Business & Economy

Major Overhaul for SOEs as GSE, SIGA Work to List Viable State Entities on Stock Exchange by End of 2025  

GCB’s Dividend Delay Raises Questions of Corporate Governance & Threatens Investor Confidence Following GCB Bank PLC’s announcement that it cannot proceed with its approved dividend payment, an expert is revealing that the issues raise serious questions of corporate governance and investor confidence. A notice by GCB Bank announced to shareholders that the Central Bank has cited it for regulatory breaches and hence cannot grant approval for dividends to be paid for last year, despite the approval by the shareholders at GCB’s Annual General Meeting in May this year. The BoG’s decision, GCB says, is linked to a regulatory issue over the reclassification of restructured cocoa bills into bonds, which has put the bank in temporary breach of the single obligor limit. This is a key that caps exposure to a single borrower. While GCB insists this is a compliance matter and not a sign of financial strain, the news lands at a sensitive time for Ghana’s financial sector. The banking industry is still adjusting to the aftereffects of the Domestic Debt Exchange Programme (DDEP), which changed how many institutions account for government-related debt instruments. The Rule Banking and financial consultant, Dr. Richmond Atuahene, explains in an interview with The High Street Journal that the Single Obligor Limit rule can be found in Act 930 of the Banks and Specialised Deposit-Taking Institutions Act 2016. Per the law, it refers to the maximum amount of credit exposure a bank or specialized deposit-taking institution can have to a single customer or obligor. According to the Act, banks are not allowed to exceed a certain percentage of their net own funds to a single obligor, an individual or a company. This is to limit the risk of exposure to a single customer. Some key aspects of the single obligor limit include - Purpose: To reduce systemic risk and encourage diversification - Limit: A maximum of 25% of net own funds to a single counterparty - Objective: To prevent banks from being overly exposed to a single borrower or group, thereby protecting depositors and maintaining financial stability This limit is an essential component of Ghana's banking regulations, aimed at ensuring the soundness and stability of the financial system. The Corporate Governance Concern Dr. Atuahene maintains that for GCB Bank to breach the rule signals weak corporate governance. He cannot fathom why the board members sat aloof for this to occur, knowing very well the existence of the rule. He explains that the “weak corporate governance” has made GCB excessively exposed to the COCOBOD. To him, the high exposure creates what he refers to as seismic risk, meaning that in the event of the collapse of COCOBOD, GCB will be highly affected. He therefore indicated that they cannot pay dividends to shareholders as directed by the Bank of Ghana because it has flouted the law. To him, the regulator is just applying the law by cracking the whip. “It means the corporate governance was bad. Because if the directors were up and doing, they would have seen it earlier and possibly notified the BoG for remedies,” he said. The Impact on Investor Confidence The question now is whether this directive for the bank to halt dividend payouts will dent investor confidence or simply be viewed as a procedural bump. For some investors, dividend payouts are a key indicator of a bank’s strength and reliability. The postponement, emanating from breaches of law, could cause a few to reassess their positions. Others, however, see it as a sign of regulatory discipline, not weakness. Investors will be watching how quickly GCB resolves this. The response time, not just the problem itself, will shape perceptions. GCB says it is “actively engaging” with regulators to restore full compliance and proceed with the dividend as soon as possible. The bank has also reaffirmed its commitment to financial soundness and the protection of shareholder value. For now, the market remains calm, but beneath that calm lies curiosity, and perhaps a little concern.
Business & Economy

GCB Bank’s Dividend Delay Raises Questions of Corporate Governance & Threatens Investor Confidence

Relief to Citizens, But a Hole in Revenue: Axing of Covid-19 & E-Levies to Cost Ghana GH¢18B By 2027
Business & Economy

Maybe E-Levy Could Be Maintained to Finance Ghana’s Annual Cocoa Purchases – IMANI Shows the Way

No Plan for Fuel Prices? GNCCI Questions 2025 Budget
Business & Economy

Govt’s T-Bill Borrowing Strategy Could Crowd Out Private Sector – GNCCI Warns Businesses to Brace Themselves

Absa Bank Flags ‘Too Aggressive’ Cedi Rally as FX Inflows, Gold Surge Bolster Reserves
Business & Economy

NewGold ETF Drops Over 15% in One Month as Global Gold Prices Slide

Business & Economy

Ghana’s Fixed Income Market Records Consistent Declines Since January

Ghana: An Economy Whose Growth is Fuelled by Consumption Stifling Decent Jobs - A World Bank Review
Business & Economy

Government to Rely on Domestic T-Bills and Multilateral Loans for Financing Amid Limited Access to International Markets

Business & Economy

Rapid Decline in T-Bill Rates: The Joy of Gov’t But Headache to BoG –  The Urgent Need for Collaboration

T-Bill Yields ‘Crash’: 'Lazy' Banks to Lose Easy Profits as SMEs May Finally Gain Access to Credit
Business & Economy

Are Investors Fleeing T-Bills? Gov’t Records First Undersubscription of 23% As Rates Fall Again

GSE MD Urges Return to Zero Capital Gains Tax, Pushes for SOE Listings to Boost Investor Confidence
Business & Economy

Capital Market: A Key Driver for Ghana’s Economic Growth, Says Ghana Stock Exchange MD

Business & Economy

Ghanaians Shift to Treasury Bills as Investment Preferences Evolve—KPMG

Positive Staff-Level Review: Ghana’s Best-Selling Point to Attract Investors at IMF/World Bank Meetings
Business & Economy

Economist Questions Logic Behind Prez Mahama’s Sinking Fund Agenda Amid Existing Debt Crisis

Celebrations Over Cedi Gains Premature as Economy Faces Threat from Middle East Tension
Business & Economy

The Dire Impact of BoG’s Negative Equity & Urgent Need for Recapitalization – Insights from Dr. Atuahene

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Bank of Ghana Clarifies Currency Transfer Agreement with Liberia