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Stanbic Bank Group and Caterpillar Financial Services of Dubai have entered into a collaboration that will see the latter providing a range of financial services to the Mantrac Unatrac Group of Caterpillar dealerships in Ghana, Nigeria, Kenya, Tanzania, Uganda and Sierra Leone.
Ben Kruger, Standard Bank Deputy Group Chief Executive, in a remark, welcomed the collaboration, saying it is supportive of Caterpillar Financial’s goal to increase its brand presence in Africa and grow business in Southern, Central and Western Africa.
“Operations have been successfully launched in Ghana, Nigeria and Kenya with Lenya and plans are afoot to extend it to other African countries over a period of time.
“We value our existing relationship with Cat Financial and their growth plans resonate well with our strategy. We believe that this relationship provides the platform to strengthen these ties and provide further services to other countries.”
According to him, with Africa’s natural resources expected to drive strong growth and attract investment in the energy, infrastructure development and agriculture sectors, it was proper that Standard Bank provided on-the-ground banking operations, staffed by expert teams which are familiar with local business conditions and regulations to deliver Cat Financial and its customers with the highest quality of service providing support to dealers.
“Our aim is to support the dealer network in the sale of high-quality construction equipment by providing a dedicated, professional and wide array of financial plans, flexible plans, flexible payment schedules and competitive rates,” Mr Kruger stated.
UniBank Ghana Limited, a wholly-owned Ghanaian financial institution, has indicated that it is determined to attain first tier status in the banking sector.
The bank intends to achieve this status as well as command a sizeable share of the market by the end of the next decade.
Felix Nyarko-Pong, Chief Executive Officer (CEO) of Unibank which celebrated its 10th anniversary this year, speaking at a programme to climax the celebration, said the bank had chalked significant and impressive achievement notwithstanding the challenges of time since its inception.
He said the bank is a first-class employer “employing the best on the local market and retaining the best.”
In line with this, Unibank has been winning awards over the years.
Barely a year after commencing operations in the country, Unibank was adjudged the best bank in customer care and “we have gone ahead to win best bank or runner-up eight times in the 10 year history of the illustrious banking awards; more than any other bank in Ghana.”
In 2011 the bank won five awards as it was named best bank customer service; best bank corporate banking; best bank advisory service; best bank trade financing and second runner-up long term financing.
Mr Nyarko-Pong noted that the bank can now boast of a total asset of GHC750 million from GHC2.71 million in 2001 when the institution was established while its net profit after tax stands at GHC15.8 million.
On capital, the CEO mentioned that the net worth of the company stands at GHC38 million but gave assurance that the board of the bank was working to raise its stated capital to GHC 60 million by December 2012 as directed by the Bank of Ghana (BoG), regulators of the banking industry.
In the last decade, Mr. Nyarko-Pong said the bank had extended support to society through its social corporate responsibility initiatives in the area of health and sanitation, education and youth employment.
Furthermore, with focus on Small and Medium-scale Enterprises (SMEs), he said Unibank had identified and assisted a number of organizations to blossom into “big businesses which are the envy of many in Ghana.
Unibank, which had one branch in 2001, now has network of 19 branches and one agency and ranked 10th out of 25 banks and 15th in terms of total assets.
It holds about 4.1 % of industry.
By Emelia Ennin Abbey
Many people feel the urge to help out by volunteering time or income. For those whose charitable itch cannot be scratched via conventional methods, there is the possibility of operating your very own charitable foundation. It should be noted that this requires a substantial investment of time and money. It is therefore not an endeavor to be taken lightly, but for those fueled by a zeal to help their chosen causes, creating a charity can be the best way to make a difference.
The first serious consideration is money. Expect to be working for free or for a considerable pay cut during the initial phases of your charity. It is not unusual to have to live off savings for periods of a year or more.
Additionally, even after many years of successful operation, salaries at non-profits can be quite a bit lower than in the private sector. This is less true for the largest organizations, but the general trend is that the cause comes first, so be sure you are financially prepared.
Time is also a factor to be considered. Starting and operating a charity is time-consuming.
Anticipate long hours devoted to the various functions of supporting the charity. If you are still reading, it is likely you are comfortable with the time and financial commitments required and have the drive to achieve success. In fact, you probably already have a cause in mind.
Your next step then should be to craft a vision statement. This is your idea of what you hope the charity will accomplish. What inspired you to create this charity, and what do you see it achieving into the future? It is appropriate to be somewhat vague because this is just a broad overview and introduction to your cause. The mission statement is where you break down the specifics of: whom the charity is benefiting, what exactly you will be doing and how this is going to achieve your vision.
Choosing a Name
At this stage a name should be chosen. Choose a name that people can relate to. It should be something personal, memorable, and something that will support your brand and vision. This is especially important because a properly chosen name can help differentiate your charity from the 1.5 million other non-profit organizations in the United States. Getting noticed gets donations. You are now ready to get down to business. Establish a five-year plan of operations. Decide who is going to do what and how it will be done. A useful suggestion for before commencement of operations is to have enough cash for the initial capital outlay in addition to a year’s worth of operating funds.
You should also decide on a funding source. Most charities raise funds through private donations or seek out government and foundational grants. Worth looking into is the concept of “social entrepreneurism” where instead of going to traditional fundraising sources, as above, a charity instead sells a product or service with the proceeds going to the charitable cause.
A physical workplace may or may not be useful for you. Rent can rapidly increase overhead, but donors and governments prefer numbered addresses instead of P.O. boxes. In the early stages, there is really no reason your home would not suffice as a base of operations.
Get a Lawyer and an Accountant
You should also get a lawyer and an accountant who are both well versed in advising non-profit organizations. They will assist with drafting articles of incorporation required to register your charity with your state. In addition, they will be useful in registering with the IRS.
Register and Get a Board of Directors
Finally, register with your attorney general in order to be allowed to solicit donations. Finally, serious consideration should be given to the composition of the board that manages the charity. While often overlooked, having a solid board of directors will help to keep your goals in focus and prevent any unfortunate legal ramifications. The size of the board will vary with need, but be sure to constantly evaluate its performance and seek out those with experience running non-profits.
Starting a charity requires an immense dedication of time, passion for a cause, and business savvy. You may be setting out to fund an altruistic organization, but good intentions won’t pay your bills so be sure you’re financially prepared to live on a small income for a long period of time.
Chances are when you think about investing in real estate the first thing that comes to mind is your home. For many people, their home is the single largest investment they will ever make. But have you ever stopped to consider that once you purchase a home it becomes part of your overall portfolio of investments? In fact, it’s one of the most important parts of your portfolio because it serves a dual role as not only an investment but also a centerpiece to your daily life.
Though a home is one of the largest investments the average investor will purchase, there are other types of real estate investments worth investing in. The most common type is income-producing real estate. Large income-producing real estate properties are commonly purchased by high net-worth individuals and institutions, such as life insurance companies, real estate investment trusts (REITs) and pension funds.
Income-producing properties are also purchased by individual investors in the form of smaller apartment buildings, duplexes or even a single family homes or condominiums that are rented out to tenants.
In the context of portfolio investing, real estate is traditionally considered an “alternative” investment class. That means it is a supplementary investment used to build on a primary portfolio of stocks, bonds and other securities.
One of the main differences between investing in a piece of real estate as compared to stocks or bonds is that real estate is an investment in the “bricks and mortar” of a building and the land it is built upon. This makes real estate highly tangible, because unlike most stocks you can see and touch your property.
This often creates substantial pride of ownership, but tangibility also has its downside because real estate requires hands-on management. You don’t need to mow the lawn of a bond or unplug the toilet of a stock!
In this tutorial, we will discuss the types and characteristics of real estate, things to think about when buying and owning property, and the rationale for adding real estate to your portfolio.
The most basic definition real estate is “an interest in land”. Broadening that definition somewhat, the word “interest” can mean either an ownership interest (also known as a fee-simple interest) or a leasehold interest. In an ownership interest, the investor is entitled to the full rights of ownership of the land (for example, to legally use and transfer the title of the land/property), and must also assume the risks and responsibilities of a landowner (for example, any losses as a result of natural disasters and the obligation to pay property taxes). On the other side of the relationship, a leasehold interest only exists when a landowner agrees to pass some of his rights on to a tenant in exchange for a payment of rent. If you rent an apartment, you have a leasehold interest in real estate. If you own a home, you have an ownership interest in that home. Some jurisdictions recognize other interests beyond these two, such as a life estate, but those interests are less common in the investment arena.
As a real estate investor, you will most likely be purchasing ownership interests and then earning a return on that investment by issuing leasehold interests to tenants, who will in turn pay rent. It is also not uncommon for an investor to acquire a long-term leasehold interest in land, which then has a building constructed upon it. At the end of the land lease, the land and building become the property of the original land-owner.
Private Versus Public Markets
When you are planning your real estate investments, one of your first tasks is to decide what kind of exposure to the real estate market is appropriate for your situation. Different exposures produce varying levels of risk and return. Your choice will also influence the means by which you will acquire the real estate.
The first type of market you could participate in is the private market. In the private market, you would be purchasing a direct interest in one or more real estate properties. You would own and operate the piece of real estate yourself (or through a property manager), and you would receive the rent payments and value changes from that investment. For example, if you were to purchase an industrial building that was leased to one or more tenants who pay you rent, you would be participating in the private real estate market. You could also participate in this market by purchasing properties with any number of partners – this is known as a pool or syndicate.
Alternatively, you could choose to invest in the public real estate market. You would be participating in the public market if you purchased a share or unit in a publicly traded real estate company, such as a real estate investment trust (REIT). If you buy a real estate security, you are investing in a company that owns real estate and manages it on behalf of the shareholders/unit-holders of the company. As a result, your exposure to the real estate market is more indirect. A real estate security usually pays a dividend or distribution in order to send the rent payments that it receives from tenants to its shareholders/unit-holders. Any price appreciation or depreciation in the assets owned by the company is reflected in its share or unit price.
Equity and Debt Investments
When you invest in debt, you are lending funds to an owner or purchaser of real estate. You receive periodic interest payments from the owner and a security charge against the property in the form of a mortgage. At the end of the mortgage term, you get back the balance of your mortgage principal. This type of real estate investing is quite like that of bonds.
An equity investment, on the other hand, represents a residual interest in the property. When you are an equity investor, you are essentially the owner of the property. You stand to gain a lot when the property value increases or if you are able to get more rent for your building. However, if things should go wrong (for example, all your tenants vacate and you can’t make your mortgage payment) then the mortgagee, who has a priority interest in your property, may foreclose and you must forfeit your equity position to satisfy their security. In that sense, the risks of an equity position in real estate is much like that of owning stock.
The choice of whether you want to invest in equity or debt will depend upon your risk tolerance and your return expectations. The riskier choice is investing in equity, but you can also make a lot more money! As the greater the risk, the greater the reward.
The Investment Selection Matrix
Now, let’s put it all together. Once you select your market and decide whether debt or equity investing is appropriate, it becomes apparent what type of security to buy or investment to make. Take a look at the following diagram:
If you choose quadrant A, Public Equity, you should purchase real estate securities such as standard equity REITs or publicly traded real estate operating companies.
If you select quadrant B, Private Equity, you should buy direct, ownership interests in real estate properties. If you choose quadrant C, Public Debt, you would purchase a mortgage REIT, a mortgage-backed securities (MBS) or (Commercial Mortgage-Backed Securities (CMBS).
If quadrant D, Private Debt, is most appropriate, then you would lend money to purchasers of real estate, thereby investing in mortgages.
(To be continued)
Nandom Rural Bank recorded a significant growth in its total assets from GH¢4,253,768.00 in 2010 to GH¢7,243,236.00 in 2011, representing a 70.28 percent increase.
Peter Kuukyame Latuo, Chairman of the Bank’s Board of Directors, announced this at the 30th Annual General Meeting (AGM) of stakeholders at Nandom in the Nandom District of the Upper West region.
According to him, the significant growth in the Bank’s assets could largely be attributed to the significant growth in advances from GH¢658,895.00 in 2010 to GH¢1,284,617.00, representing 94.96 percent.
The Chairman noted that the Bank also recorded 87.55 percent increase in share capital, 40.98 percent increase in deposits, 26.76 percent increase in net worth and 20.43 percent increase in investments.
He said the growth in loan portfolio by 94.96 percent contributed significantly to the profit made by the Bank.
Mr. Latuo said the sectors, which benefited from the Bank’s credit activities during the year under review included agriculture (7.43 percent), transport (1.98 percent), trading (65.44 percent), and 25.15 percent for others.
The Board Chairman said as part of the Bank’s corporate social responsibility some donations were made to institutions including the District Directorate of the Ghana Health Services, Lambussie-Karni, Lawra and Wa Municipal District Agric Development Units towards Farmers’ Day celebration.
Other institutions that benefited from the Bank’s donations were Nandom Students’ Union Holiday Programme and the Nandom Senior High School (SHS).
Mr. Latuo mentioned development of a strategic plan, completion and the refurbishment of the Bank’s head office building and the mobilization of share capital as some plans the Bank intends to undertake next year.
He also cited post computerization and networking as well as high loan default rate as some of the challenges confronting the Bank.
A business desk report
For the third consecutive time this year, the Bank of Ghana (BoG) has maintained the prime rate at 15 percent.
Since June 2012, the Central Bank has maintained the prime rate, which is the benchmark indicator that the Bank lends to universal banks.
Dr Henry Kofi Wampah, Chairman of the Monetary Policy Committee of the Bank of Ghana, at a press briefing yesterday disclosed that the decision was based on the fact that the risks to inflation and growth rate of the country were balanced.
The acting governor made the announcement while presenting highlights of the 53rd Monetary Policy Committee meeting which was the last for this year.
The meeting focused on the latest economic conditions and risks to the growth outlook of the country.
He stated that the committee observed an improvement in the economic trends in the third quarter of the year, which contrasts trends in the first half of the year.
On growth outlook, he said positive developments in the private sector, particularly in terms of credit expansion and improved credit conditions “are upside risks which could be moderated by the on-going energy sector challenges and global uncertainties.”
Dr Wampah stated that provisional estimates of real Gross Domestic Product (GDP) growth from the Ghana Statistical Service, for the second quarter was 2.5 per cent compared to 20.6 per cent for the same period of 2011 mainly due to base effects from the addition of oil.
Chairman of the Board of Directors of Jomoro Rural Bank, Dr. Cosmas Cobbold has stated categorically that the bank will consolidate its gains in the competitive banking environment.
Against this backdrop, the bank’s total assets grew by almost 43 per cent from GH¢4,226,524 in 2010 to GH¢6,042,326 in 2011 mainly due to an increase in deposits, investments, cash and bank balances as well as growth in the other financial indicators of the bank.
Dr. Cobbold made these remarks at the bank’s 15th Annual General Meeting (AGM) of shareholders at Tikobo No. 1 in the Jomoro District of the Western region last Saturday.
He disclosed that Jomoro Rural Bank had computerized and networked its head office and the Half Assini, Elubo, Tikobo No. 2 branches under the MiDA and ARB Apex Bank computerization project.
He mentioned that two new agencies at Aiyinasi in the Ellembelle District and that of Boinso in the Aowin-Suaman District had been inaugurated.
Despite the adoption of various interventions and prudent management policies, the Board Chairman enumerated severe competition from other banks, rapid growth of credit unions, savings and loans companies as well as loan delinquency as major challenges facing Jomoro Rural Bank.
Samuel Kofi Osei, Operation Manager of Takoradi Branch of ARP Apex Bank, who represented the acting Managing Director of Apex Bank, advised the bank to develop more products that were demand-oriented to diversify the banks income streams.
“Explore more business opportunities in micro financing and grant more quality loans and advances to your clients to sustain your operations and grow your business,” he said.
He called on rural and community banks to identify the risks and map up strategies to mitigate them, adding, “Your bank should work as a team to enable you achieve the desired results for the bank.”
FROM Sam Mark Essien, Takoradi
Month after month, many individuals look at their bank and credit statements and are surprised that they spent more than they thought they did. To avoid this problem, one simple method of accounting for income and expenditures is to have personal financial statements. Just like the ones used by corporations, financial statements provide you with an indication of your financial condition and can help with budget planning. There are two types of personal financial statements:
- Personal cash flow statement
- Personal balance sheet
Now let’s explore these in more detail.
Personal Cash Flow Statement
A personal cash flow statement measures your cash inflows and outflows in order to show you your net cash flow for a specific period of time. Cash inflows generally include the following:
Interest from savings accounts
Dividends from investments
Capital gains from the sale of financial securities like stocks and bonds
Cash inflow can also include money received from the sale of assets like houses or cars. Essentially, your cash inflow consists of anything that brings in money.
Cash outflow represents all expenses, regardless of size. Cash outflows include the following types of costs:
Rent or mortgage payments
Entertainment (books, movie tickets, restaurant meals, etc.)
The purpose of determining your cash inflows and outflows is to find your net cash flow. Your net cash flow is simply the result of subtracting your outflow from your inflow. A positive net cash flow means that you earned more than you spent and that you have some money left-over from that period. On the other hand, a negative net cash flow shows that you spent more money than you brought in.
Personal Balance Sheet
A balance sheet is the second type of personal financial statement. A personal balance sheet provides an overall snapshot of your wealth at a specific period in time. It is a summary of your assets (what you own), your liabilities (what you owe) and your net worth (assets minus liabilities).
Assets can be classified into three distinct categories:
Liquid Assets: Liquid assets are those things you own that can easily be sold or turned into cash without losing value. These include checking accounts, money market accounts, savings accounts and cash. Some people include certificates of deposit (CDs) in this category, but the problem with CDs is that most of them charge an early withdrawal fee, causing your investment to lose a little value.
Large Assets: Large assets include things like houses, cars, boats, artwork and furniture. When creating a personal balance sheet, make sure to use the market value of these items. If it’s difficult to find a market value, use recent sales prices of similar items.
Investments: Investments include bonds, stocks, CDs, mutual funds and real estate. You should record investments at their current market values as well.
Liabilities are merely what you owe. Liabilities include current bills, payments still owed on some assets like cars and houses, credit card balances and other loans.
Your net worth is the difference between what you own and what you owe. This figure is your measure of wealth because it represents what you own after everything you owe has been paid off. If you have a negative net worth, this means that you owe more than you own.
Two ways to increase your net worth are to increase your assets or decrease your liabilities. You can increase assets by increasing your cash or increasing the value of any asset you own. One note of caution: make sure you don’t increase your liabilities along with your assets. For example, your assets will increase if you buy a house, but if you take out a mortgage on that house your liabilities will also increase. Increasing your net worth through an asset increase will only work if the increase in assets is greater than the increase in liabilities. The same goes for trying to decrease liabilities. A decrease in what you owe has to be greater than a reduction in assets.
Bringing Them Together
Personal financial statements give you the tools to monitor your spending and increase your net worth. The thing about personal financial statements is that they are not just two separate pieces of information, but they actually work together. Your net cash flow from the cash flow statement can actually help you in your quest to increase net worth. If you have a positive net cash flow in a given period, you can apply that money to acquiring assets or paying off liabilities. Applying your net cash flow toward your net worth is a great way to increase assets without increasing liabilities or decrease liabilities without increasing assets.
If you currently have a negative cash flow or you want to increase positive net cash flow, the only way to do it is to assess your spending habits and adjust them as necessary. By using personal financial statements to become more aware of your spending habits and net worth, you’ll be well on your way to greater financial security.
The Task Force established to rid Ghana’s open markets of foreign retailers have discovered 70 companies which have failed to honour their tax obligations and flouted other trade laws of the nation.
K. Ntim Atuahene, Director in Charge of Domestic Trade and Distribution at the Ministry of Trade and Industry, disclosed this to BUSINESS GUIDE at the Accra Mall.
He said the work of the inter-agency task force was yielding positive results.
The Ministry of Trade and Industry constituted the Inter-Agency Task Force at the beginning of this year to assist non-Ghanaian traders to relocate to other more acceptable destinations after members of the Ghana Union of Traders’ Association (GUTA) complained about their activities.
“Due to the operations of the task force, 70 foreign companies have paid their corporate taxes, filed VAT and annual returns and paid social security contributions for their employees,” Mr Atuahene said.
Since the commencement of the operations of the task force, the Director in Charge of Domestic Trade noted that about 120 shops had been identified and closed in Accra.
However, following pleas from the affected companies and some bodies such as the ECOWAS Trade Commission, the shops were allowed to re-open while they were given some time to leave the markets.
“Petty trading within the market is solely reserved for Ghanaians and we would like it to remain as such,” said Mr Atuahene.
Since the suspension of eviction exercise, he stated that a lot of consultations and sensitization have been done for the past nine months, stressing that “the affected traders have been formally notified.”
To him, the recent activities of the task force against non-Ghanaian traders had attracted criticism from different players in the industry.
He emphasized that “we very much cherish their investments; however, these non-Ghanaian traders must make the effort to comply with the laws of the land.”
For the success of the exercise, he said the ministry appealed to all stakeholders to comply with the regulations on trading activities “for smooth movement and success of the work of the task force.”
The Ghana Investment Promotion Council law reserves retail trading activities for Ghanaians.
By Emelia Ennin Abbey
Simon Dornoo, Managing Director of the Ghana Commercial Bank (GCB), has said the bank would adopt a sharper performance management system in order to meet the challenge ahead.
He said the process would separate result-orientated workers from those not inclined to contribute their expected quota.
Mr Dornoo was addressing the 24th Biennial Delegates Conference of the Employees Union (UNICOF) of the Ghana Commercial Bank Ltd in Ho on Saturday.
The theme for the occasion was: “The Role of GCB Service Culture Plan in Ensuring Quality Customer Service Delivery, Union’s Contribution”.
Mr Dornoo said attitudes must change, especially customer relations so that the Bank would not only hold on to its clients, but also secure more business through their testimonials.
He said the Bank’s performance this year had been good but must be sustained and that the Bank would continue to go digital to reach clients.
Dr Fritz Gockel, Board Chairman, said remuneration was correlated with productivity, stressing the need for service culture to improve to bring in more business “as no one shares poverty”.
He urged the workers to ensure that the Bank’s slogan “We Serve You Better” would reflect in all their activities.
Isaach Bondorin, outgoing Chairman of the Employees Union, said the staff was the most important component of the change drive going on in the bank, saying “our satisfaction will reflect on the agenda just as our dissatisfaction will do same”.
He called on politicians to allow the change process to continue unhindered, adding that “irrespective of which government is elected in December management and board should remain intact for us to complete the change agenda.”
He called on his colleagues to contribute actively to the success of the change agenda.
“We have set our hand on this plough of change to drive our dear bank to a greater pedestal, may we not lose focus but remain positive and build that strong partnership with management to the attainment of this success,” Mr Bondorin said.
Henry Ametefe, Deputy Volta Regional Minister, said certain mannerisms of some staff, especially tellers, often gave image problems to the bank, saying “quality service and the lack of it had become a major issue in this country and its institutions.”
Mr Ametefe applauded the bank for refurbishing some of its branches, increasing access to ATMs and introducing other easy banking products through the internet and phones.
He said the change dubbed, “Good to Great” was being felt by the bank’s customers across the country.