Ecobank Ghana Boss, Daniel Kwei-Kumah Sackey has urged government to commit to its promise of delivering the National Identification Cards this year because it will help reduce the cost of banking and rope in more Ghanaians into the financial service ecosystem.
Speaking to Adom News at this year’s Annual General Meeting (AGM) of the bank, Dan Sackey noted that the greater majority of Ghanaians are unbanked today because they lack the proper ID’s required by banks to open bank accounts for them.
He said “for us banks today – the cost of identification is one of the major drivers of our cost structure – it is one of the things that are driving a lot of people outside the financial ecosystem – a lot of people are either unbanked or underbanked because they do not have a proper means of ID.”
Dan Sackey believes that once the country moves to proper identification of individuals, including a reliable street address system, it will immediately boost the pool of Ghanaians that can have easy access to financial services and that will automatically drive cost of ID down for the banks, which will then reflect in the reduced cost of banking.
He therefore declared Ecobank’s full support for government’s move to bring the National ID onboard this year, and expressed the hope that government will commit to delivering on that promise.
Meanwhile at the AGM, Ecobank declared a dividend of GHC0.82 per share, which means the bank is paying out as high as 99% of its 2016 profits after transfers into regulatory and statutory reserves.
For year 2016, the bank realized a total revenue of GHC1.2billion from its consumer banking, commercial banking as well as corporate and investment banking activities.
The 2016 revenue represents an 18% growth over that of 2015, and the bank said it is attributable to gains from de-recognition of financial assets relating to the oil sector.
But the growth in revenue did not come without challenges, as profit before tax stood at GHC462.7 million, and was driven downwards by increased loan book impairments.
“Impairment charges were up 54% from GHC116 million to GHC179 million, while operating cost grew 26% over that of 2015 and reached GHC566 million.
“Net interest income also increased 5 per cent from GHC682 million to GHC719 million, while net fees and commission declined by 15% from GHC185 million to GHC157 million due to lower transaction volumes associated with the operating environment,” the bank’s Board Chair, Terence Ronald Darko told shareholders.
He however noted that the bank recorded an impressive cost to income ratio of 46.94%, which compares favorably with the industry average, and was a testament of the bank’s improvement in its returns on assets and successful outcomes of its cost cutting initiatives.
While cutting cost, the bank also reduced the rate of non-performing loans down to 15.87%, from 18.01% in 2015, and also grew deposits by 12% over that of the previous year, with non-interest deposits constituting 75% of the whole.
Ecobank also undertook a number of impactful corporate social responsibility activities in the areas of health, education, sports, and environment among other things.
Shareholders approved of the dividend, the remuneration of the board of directors and auditors, as well as the appointment of Mr. Dan Sackey, and Mr. Eddy Botchwey to the Board of Directors, as Mr. George Mensah-Asante resigned from the Board to go head Ecobank Liberia, and Madam Evelyn Tall also resigned.