German Investment Corporation to aquire 12% stake in Ghana’s UT Bank with $10m
German Investment Corporation (DEG), a member of KfW Bank Group is to acquire about 12 per cent stake in UT Bank.
This follows a deal, which makes it possible for the corporation to invest $10 million in equity in the bank.
DEG, which finances investments of private companies in developing and emerging economies, is seeking internal approvals for the investment.
The deal follows a similar one in April with the International Finance Corporation (IFC), which had invested a total of $30 million, equally split in equity investments and Loan and Trade Finance Facility.
With the new capital injections, UT Holdings Limited shareholdings will whittle to about 41.6 per cent from the current level of 61.11 per cent while IFC and DEG will together account for about 32 per cent holdings.
Kofi Amoabeng, Chief Executive Officer of UT Bank, told shareholders at the annual general meeting that the investments would position the bank to better compete and boost lending to small and medium scale enterprises.
Besides, the investment by the three institutions as shareholders would give the bank a positive image in the outside world and also provide expertise and technical advice in driving the company forward.
Mr Amoabeng said with the investments, the bank had now scaled up the Central Bank’s GH¢60 million recapitalisation requirement, adding, however that the target of the bank was to get beyond GH¢100 million to be better placed to compete for opportunities within the economy.
He said the bank had also successfully negotiated a long-term loan of eight million Euros from European Investment Bank to help fund projects with a longer maturity period.
UT Bank during 2011 saw net profit rose to GH¢13.065 million from GH¢9.300 million in 2010 while total assets grew by 38 per cent to GH¢712 million from GH¢517 million in 2010.
Gross loan portfolio stood at GH¢499 million, an increase of 45 per cent over the previous year, attributable to increased loan disbursements.
Loan disbursements almost doubled to GH¢408 million up from GH¢210 million in 2010 with the Small and Medium Enterprises sector accounting for 57 per cent of the loan.
Mr Amoabeng said the bank was alert to risk and would operate within an acceptable level of risk appetite as approved by the board.
There was no dividend payout.
Board Chairman Joseph Nsonamoah explained that the decision not to pay dividend was because of a Bank of Ghana restriction to refrain from doing so as the bank was yet to meet the prescribed capital.
Source: GNA