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Gov’t Settles GH¢10bn Interest Under DDEP, Reinforcing Market Confidence
Business & Economy

A Glimpse into Govt’s Bold Moves to Rescue Ghana’s Cocoa Sector

Online Banking
Business & Economy

Online Banking Soars 164% to GH₵28.8 Billion with 45.4% More Transactions

Fiscal Discipline of Economic Suffocation? IFS Concerned Over How Gov't Underspending is Squeezing Growth
Business & Economy

NIB’s Recapitalisation: “We Chose to Spend to Save a Bank, Not to Collapse it.”—Finance Minister

Commitment to Ban Raw Material Exports by 2030: Bold Initiative, But Will Walking the Talk Come Cheap?
Business & Economy

Commitment to Ban Raw Material Exports by 2030: Bold Initiative, But Will Walking the Talk Come Cheap?

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

Tough But Necessary: Banks Laud BoG's New Directives as Bold Move to Improve Banking Ecosystem
Business & EconomyNews

BoG Governor Urges Bretton Woods Institutions to Align Global Financial Policies for Developing Nations

World News

South Africa’s Widening Budget Deficit Raises Investor Concerns Amid Fiscal Challenges

From Independence to Strategic Partnership: How Ghana Helped Shape America's Africa Policy
News

From Independence to Strategic Partnership: How Ghana Helped Shape America’s Africa Policy

Ghana Remains Important Partner to the US Despite 10% Tariff Hike – US Amb. to Ghana Calls for Calm 
Business & Economy

Ghana Remains Important Partner to the US Despite 10% Tariff Hike – US Amb. to Ghana Calls for Calm 

The $1Bn Cocoa Financing Bond: Dr. Atuahene Makes Strategic Recommendations to Enhance Success
Business & Economy

Ghana’s Bondholders Back $13 Billion Restructure Exchange Offer

Business & Economy

Investors Don’t Want “Noise” – Prof Bopkin Schools Bryan Acheampong, Reveals Economic Consequences of Fiery Political Comments

Government Bond Market Return: Dealer Proposals Due Today Amidst Heavy Scrutiny
Business & EconomyNews

Eurobond Investors’ Suit: Fmr. SEC Boss Calls for Thorough Scrutiny of Investment Prospectus

EU
Global Perspectives & Leisure

President von der Leyen Outlines Vision for a Robust EU–South Africa Partnership at Cape Town Summit

World News

Wall Street Plunges as Recession Fears Grip Global Markets; Key Tech Stocks Hit Hard

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Government to Launch External Debt Restructuring Offer in Few Days, Says Finance Minister