The Energy Commercial Bank has launched an Initial Public Offering (IPO) to raise at least GH¢340million to, among other things, meet the Bank of Ghana’s minimum capital requirement of GH¢400million.
With approval from the Securities and Exchange Commission (SEC), Bank of Ghana, and the Ghana Stock Exchange (GSE), the bank is offering 261million new ordinary shares at GH¢1.30p per share and the offer, which began yesterday, October 2, is expected to end on October 30, 2018.
The wholly-owned Nigerian bank, which currently has GH¢60million in stated capital, will see its board reconstituted to reflect the composition of the new shareholders should the IPO successfully raise the expected capital.
The bank’s Managing Director, Christiana Ekaete Olaoye, told a gathering at a ceremonoy to announce the IPO that: “The launch of the Energy Commercial Bank IPO is a confirmation of our dedication to the people of Ghana and our confidence in the Ghanaian economy as we look forward to a future with hope and optimism.”
In listing on the Ghanaian Stock Exchange, your bank is moving to another level by improving transparency, enhancing corporate governance practices and also supporting the regulator to promote safety, soundness, and stability of the financial system,” she said.
She added that becoming a public limited liability company raises investor confidence in the bank’s brand and strategically positions it for exciting opportunities and rapid growth. “We believe that Energy Commercial Bank’s IPO will have a great impact on the Ghanaian economy and expand the financial inclusion agenda by the government,” she said.
The Managing Director added that the IPO is also expected to help the bank expand its business to deliver superior value and customer-centric services. “We plan to expand our reach between 2019 and 2022, and will therefore not relent in our efforts in doing this by performing consistently in the coming years in order to maximise returns to shareholders,” she added.
Acting Chairman of the bank’s Board, David Adom, noted that the bank will endeavor to protect depositors and shareholders’ funds and improve on returns on investment, strive to attain job security and improved staff conditions of service and be mindful of its tax obligations.
In urging Ghanaians to buy shares, he noted that the offer is open to corporate bodies, pension funds, customers, members of staff and, more importantly, to the unknown ordinary person. “There is no restriction to nationality but our emphasis is more on Ghanaians to partner the bank.”
Dr. Ernest Addison, Governor of the Central Bank, in a speech read on his behalf, congratulated the bank on its IPO launch, saying: “From a regulatory perspective, we welcome the decision to go public as it would help the bank in a number of ways, including meeting the new minimum capital requirement.”
He stressed that the new capital requirement has become necessary to align the banks’ capital base more closely with economic realities, and as a regulator, the Bank of Ghana is looking forward to a strong and well capitalised banking sector that is able to support the transformation of the Ghanaian economy.
“We will therefore continue to encourage banks that want to list on the GSE to harness the potential of raising long term financing to do so,” he said.
Jacob Aidoo, Head of Issuers at the Securities and Exchange Commission (SEC), urged the bank to continue to uphold good corporate governance practices and abide by all regulatory guidelines. “This will help other banks and corporate institutions look at the capital market as a viable platform to raise capital,” he said.
Elizabeth Martey, General Manager at the Ghana Stock Exchange, added that the bank’s IPO is a signal to other banks to see the benefits banks on the market enjoy.
“The banks listed create wealth for the investment community. Though Energy Commercial Bank is rooted in Nigeria, raising money in Ghana means you have confidence in the Ghanaian market. We expect that you will create value for investors and constantly provide the market with price sensitive information while adhering to the best corporate governance practices,” she said.