Shareholders of CAL Bank have voted for the bank to move 50 million cedis from its income surplus to stated capital in order to meet the minimum capital requirement.
This was at an Extraordinary General Meeting held on Monday [December 17, 2018].
This also follows the bank’s decision to solely rely on capitalization of income surplus in meeting the minimum capital requirement.
In an interview with Citi Business News on the implication of the move on Cal bank, the Managing Director of Cal bank, Frank Adu Junior lauded its positive impact.
He added that the bank will however complete the whole process by reconciling information with the Bank of Ghana and the Registrar General’s Department.
“We’ve met the minimum capital requirement of 400 million cedis prescribed by the central bank. The principal approval that you need is for shareholders to pass that resolution. Once that is passed, you need the central bank to agree that your audited results are acceptable and then your register the increase at the Registrar General,” he explained.
Monday’s meeting and shareholders’ approval is subsequent to an earlier one carried out at the bank’s Annual General Meeting in May this year.
At the time, shareholders approved the transfer of 250 million cedis from income surplus to stated capital.
The commercial banks have till December 31 to meet the new capital requirement.
Already, the central bank has indicated that twenty-two banks have met the new capital level.
Two of these, the Governor of the Bank of Ghana, Dr. Ernest Addison has indicated are mergers.
Meanwhile commenting on the future of the bank’s focus, the Cal bank MD stressed that it will still focus on its core banking principles.
“Our focus won’t change; for the whole process of capitalization, there was no injection of fresh capital. It was money that was already in the bank but differently categorized as income surplus which has now been moved to stated capital.”
Mr. Adu added: “When you move money from income surplus to stated capital, it means it is no more available for distribution but if stays in income surplus it means that shareholders can pass a resolution to distribute that money as dividends.”
CAL Bank received its Universal Banking License in 2004.
The bank currently has 29 branches and Agents with 106 ATM locations and numerous POS terminals across Ghana.
Source: Citi Business News