The resolution was passed at an Extraordinary General Meeting (EGM) of the shareholders held in Accra on Thursday, December 28, last year.

The resolution received an overwhelming endorsement, without any opposition or abstention.

The approval now empowers the bank to raise the additional equity capital of up to GH¢2 billion through a renounceable rights issue.  

The exercise was in furtherance of the bank’s intention to raise additional capital to shore up its minimum paid-up capital which has been adversely affected by factors, including the impact of the recent Domestic Debt Exchange Programme (DDEP) and challenged performance of the banking sector over the past two years.

Other resolutions, including the approval of the appointment of a new external auditor for ADB, were also overwhelmingly passed in line with due process, the bank said in a statement.

Speaking at the EGM, the Board Chairman of the Bank, Daasebre Akuamoah Agyapong II, indicated that per Section 28(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), ADB was required to maintain the prescribed minimum paid-up capital (unimpaired by losses, including accumulating losses or other adjustments).

“The current minimum paid-up capital prescribed by the Bank of Ghana for banks, including ADB, is GH¢400 million,” he added. 

However, Daasebre Agyapong stated that the recent adverse economic events (including the DDEP and impairments in the loan book of the bank) unfavourably impacted the minimum paid-up capital of the ADB Bank.

The board chairman highlighted the crucial role the capital infusion would play in advancing the mandate of the bank in promoting socio-economic development through agriculture and more.

Liquidity

The bank’s third-quarter results showed growth in net interest income and operating income of GH¢397 million and GH¢621 million respectively.

Although the ADB reported a decline in net profit at the end of the third quarter of last year, largely due to phase two of the DDEP and impairments, deposits from customers increased significantly to GH¢7.7 billion, from GH¢5.2 billion in the same period in 2022.

“This is mainly a result of the bank’s ability to achieve its deposit target, by mobilising the GH¢2.5 billion additional deposits from customers,” ADB said in a statement.  

The bank’s total assets also grew significantly from GH¢7.1 billion in the third quarter 2022 to GH¢9.3 billion in the same period last year, indicating a substantial asset growth of GH¢2.2 billion.

However, liabilities of the bank also saw significant growth to GH¢8.6 billion in the third quarter of last year 2023, compared to GH¢6.1 billion in the same period 2022. 

Post capital injection outlook

The shareholders’ overwhelming approval of the resolutions at the EGM indicates their enthusiastic willingness to recapitalise the bank to enable it to continue to play its strategic role in agricultural development in Ghana.

The Managing Director of the bank, Alhassan Yakubu-Tali, expressed gratitude for the resounding vote of confidence from the shareholders, adding that the additional capital would significantly enhance the overall operations of ADB.

“The additional capital injection will provide solidity and more comfort to our customers, investors and the general public.

For this gesture, I want to say a big thank you to our shareholders for the significant milestone chalked up,” he said.

Mr Yakubu-Tali added that the injection of additional capital would not only fortify the bank's financial strength, but also position it strategically to extend its continuous support to the agricultural sector and other critical areas of operations.

Background

The ADB PLC is listed on the Ghana Stock Exchange, with majority of its shares being owned by the government.

The bank also has a sizeable proportion of private institutional and retail shareholders.