UT Bank is set to complete an arrangement for a US$10million equity investment and a US$5million subordinated debt from the German Investment Corporation (DEG) by mid-year.

The facility comes on the heels of a capital injection of US$15million — US$5million Senior Loan and a US$10million Trade Finance Guarantee Facility — from the International Finance Corporation (IFC), the private-sector arm of the World Bank.  

The banks’ shareholders at an annual general meeting held this week further approved the transfer of GH¢3million from the bank’s income surplus account to stated capital. This is expected to increase the total stated capital of the bank to GH¢80million by the end of the year.

“The increase in the capital base is a proactive step against any future increase in the minimum capital requirement of banks. We would not want the bank to fall into foreign hands,” Mr. Prince Kofi Amoabeng, Chief Executive Officer, said.

“These investors have been chosen carefully by the board, as they all bring not only equity to the table but also other finance options to help us drive the business forward. The Bank has deepened its relationship banking, monitoring and credit-assessment procedures to deliver sustainable value.

“The bank will continue to support the small- and medium-scale enterprise (SME) sector, which is the focus of the bank. It has no plans to diversify,” Mr. Amoabeng said.

Mrs. Pearl Esua-Mensah, Deputy Managing Director, said the bank will increase its support to the SME sector. “We will develop new products and services this year, aimed at strengthening the SME sector in the country.”

The equity investment by DEG has altered the shareholding structure of the company. UT holdings, IFC and DEG now hold 41.6 percent, 22 percent, and 10 percent respectively.

During the 2011 financial year, the bank’s profit before tax increased by 42 percent from GH¢12million in 2010 to GH¢17.3million. Its profits for the year also went up from GH¢9.3million to GH¢13million.

The bank opened 113,000 new accounts in the year under review. It significantly increased its net fees and commission by 300 percent, from GH¢4.5million in 2010 to GH¢18.6million.

 It however recorded a 1.9 percentage point increase in its non-performing loans (NPLs), from 12 percent in 2010 to 13.9 percent.

By Dominick Andoh

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