Business News of Tuesday, 27 November 2018
The Social Security and National Insurance Trust (SSNIT) has disclosed that most banks it is a shareholder in, have been unable to pay dividends for last year due to the increase in the minimum capital requirement.
The Director General of SSNIT, Dr. John Ofori Tenkorang explains to Citi Business News this has also affected the Trust’s projections of investments in such institutions.
He made the remarks at a presentation of dividends by the Trust Hospital and Labadi Beach Hotel where he bemoaned the non payment of dividends by some of the businesses the Trust has invested in.
Commercial banks in the country have till the end of 2018 to meet the new 400 million cedis minimum capital.
The situation has seen most of them tap into their income surplus to meet the new capital level.
The SSNIT boss is however hopeful of a turnaround which should see majority of investments yielding results.
“Some of the banks have not paid dividends because of the minimum capital requirement. So a lot of them have taken part of their earned income and used it to capitalize. So some of the banks haven’t paid us dividends but we understand where the money is going,” he stated.
Dr. Ofori Tenkorang added: “Some of these companies are a bit troubled because they have legacy issues to deal with. There are certain debts that need to be paid, some of them have invested in real estate ventures where the market has suffered and so in that sense business is not as good as it is supposed to be.”
“But businesses go in cycles; there are upturns and downturns. So we are hoping that the ones that are not able to pay us dividends will be able to work out through a restructuring and they will be able to give us handsome returns when market conditions are right.”
The Trust Hospital, which has been a standalone institution since January 1, 2013, paid a dividend of GH¢579,979.
This represents 25% of the company’s profit after tax of GH¢2,319,916.
Labadi Beach Hotel on the other hand paid dividends of GH¢1,000,000.