Ecobank Ghana Limited and its Subsidiaries

Ecobank Ghana Limited and its SubsidiariesConsolidated Financial Statements

for the year ended 31st December, 2010.

Notice of meeting 1

Corporate information 2

Board of directors profile 3

Highlights 7

Business review 8

Chairman’s address 10

Managing director’s statement 13

Report of the directors 16

Corporate governance 18

Report of the independent auditor 21

Consolidated income statement 22

Consolidated statement of comprehensive income 23

Consolidated balance sheet 24

Consolidated cash flow statement 25

Consolidated statement of changes in equity 26

Notes 28

Shareholder information 68

Resolutions 70

Proxy Form 71

Contents

Notice of Meeting

AGENDA1. TO CONSIDER AND ADOPT the Statement of

Accounts of the Company for the year ended the 31st day of December, 2010 together withthe Reports of the Directors and Auditors thereon.

2. TO DECLARE a Dividend.

3. TO RATIFY the Appointment of Directors

4. TO APPOINT KPMG as Auditors for the Bank

5. TO AUTHORISE the Directors to fix the remuneration of the Auditors.

A MEMBER entitled to attend and vote at the Meetingis entitled to appoint a Proxy to attend and vote inhis/her/its stead. A Proxy need not be a Memberof the Company. The appointment of a Proxy willnot prevent a member from subsequently attendingand voting at the Meeting in person.

A Proxy Form is on the last page which should becompleted and deposited with the Registrars atGhana Commercial Bank, Registrars Office, ThorpeRoad, High Street, Accra not later than 3.00 pm onWednesday, 27th April, 2011.

Dated at Accra,This 18th Day of February, 2011.BY ORDER OF THE BOARD

AWURAA ABENA ASAFO-BOAKYE (MRS.) (Company Secretary).

NOTICE IS HEREBY GIVEN that theAnnual General Meeting (AGM) of Ecobank Ghana Limitedwill be held at the National Theatre, Accra on Thursday,April 28th, 2011 at 10.30 a.m. to transact the followingbusiness:

signed

Corporate Information

Board of Directors

Auditor

PricewaterhouseCoopersChartered AccountantsNo. 12 Airport CityUna Home, 3rd FloorPMB CT42CantonmentsAccra

Registered Office

Ecobank Ghana Limited19 Seventh AvenueRidge WestPMB GPO Accra

RegistrarGhana Commercial Bank LimitedThorpe RoadHigh Street , Accra

Tei Mensa Mante (Chairman - Resigned 24th April 2010)

Lionel Van Lare Dosoo (Appointed Chairman 24th April 2010)

Samuel Ashitey Adjei (Managing Director)

Frances Adu-Mante (Mrs.) (Resigned 22nd October 2010)

Kofi Ansah

Ernest Asare (Appointed 22nd October 2010)

Mariam Gabala Dao (Mrs.)

Albert Kobina Essien (Resigned 22nd February 2010)

Adegboyega Oladapo A. Ojora

Yves A. Coffi Quam-Dessou (Substitute Director -Resigned 21st April 2010)

Evelyne Tall (Appointed 14th July 2010)

Yeboah Rosemary (Appointed 22nd October 2010)

Secretary Awuraa Abena Asafo-Boakye

Board of Directors Profile

Samuel Ashitey Adjei Managing Director

Sam has been Managing Director of Ecobank Ghana Ltd since January 2006 andhas recently been given additional responsibilities as Cluster head for countrieswithin the West African Monetary Zone (WAMZ) region. Sam is a seasoned bankerwith over 19 years experience in the Ecobank Group. Various positions held priorto his appointment as the Managing Director include: Deputy Managing Director(DMD), Executive Director with oversight responsibility for the Corporate andTreasury Group of the Bank and Acting Managing Director of Ecobank Liberia. Heholds a BSc in Statistics, and an MBA(Finance) from the University of Ghana,Legon.

Lionel Van Lare Dosoo Chairman

Lionel was a Deputy Governor of Bank of Ghana from 2000 to 2009. As DeputyGovernor, he was a member of the Monetary Policy Committee. Other positionsheld during this period include Head of Planning, logistics and implementationCommittee of the Ghana Cedi redenomination exercise (2007), Member andRepresentative of Bank of Ghana on the Revenue Agencies Governing Board(Chairman 2005 -2008), and Member of the Committee on the design andimplementation of the e-zwich platform for all financial institutions.

Prior to his appointment as Deputy Governor, he worked with the Pacific Bank,Los Angeles, (Citi National Bank), where he was Vice President. Other institutionshe worked for are Indosuez Bank, Los Angeles (Credit Agricole), Wells Fargo Bank(Los Angeles) and Chase Manhattan Bank.

Mr Dosoo holds a BSc from the New York University (Stern School).

Kofi Ansah Non-Executive Director

An engineer by profession, Kofi currently works as a mining and energy consultantafter a distinguished career in the public service. He holds a BSc MechanicalEngineering from the Kwame Nkrumah University of Science and Technology,Ghana and MSc Metallurgy from Georgia Institute of Technology, USA. He iscurrently a member of the boards of Goldfields International (South Africa),Goldfields Ghana Ltd, Abosso Goldfields Ltd, and Aluworks Ltd.

Ernest Asare Executive Director

Ernest is in charge of the bank's Operations and Information Technology. He hasbeen with the Bank since its inception in 1990. He has been involved withEcobank's expansion programme in Ghana, Mali and Guinea and other countriesin Eastern and Southern Africa. Ernest also coordinates special projects of theBank and remote operations. He led the GCNET - Customs collection project nowin operation at Tema, Accra Airport, Takoradi, Elubo and Aflao.He has participated in senior executive training programmes at the followinginstitutions, Havard Business School, Boston and Witwatersrand University BusinessSchool, Johannesburg.

Board of Directors Profile (Continued)

Mariam Gabala Dao Non-Executive Director

Mariam has over 20 years of diversified professional experience in developmentfinance within both the private and public sectors in Cote D'ivoire. She is currently'the Regional Representative for the Francophone Africa of the EcumenicalDevelopment Co-operative Society (SCOD). She holds a Diploma (finance/accountingoption) from the Higher Commercial School, Abidjan.

Adegboyega Oladapo Adekunle OJora Non-Executive Director

A business executive by profession, Adegboyega is currently the Chairman andChief Executive Officer of Discoveries Resources Limited in Nigeria. He is also theChief Operating Officer of Adekunle Ojora & Co, Chief Operating Officer of OjoraGroup and Consultant of Evans Nigeria Book Publishers Ltd. He is also the ExecutiveDirector & Chief Operating Officer of Lagos Investment Ltd and Chief OperatingOfficer of Nigerlink Group. He holds B.L from King's College London (LondonUniversity) and an LLB from the Nigerian Law School, Lagos,Nigeria. He also hasan MPhil in International relations from the Magdalene College (CambridgeUniversity).

Board of Directors Profile (Continued)

Rosemary Yeboah Executive Director

Rosemary Yeboah is a Banker with over 20 years banking experience workingwith International Banks in the United Kingdom, Ghana and Southern Africa,including Standard Chartered Bank and Credit Suisse First Boston, and has beenwith the Ecobank Group since 2008. She has held various positions within theEcobank Group including Group Head, Multinational & Regional Corporates, withresponsibility for managing the Networked Corporate Clients within the Bank,and Regional Head, Corporate Banking, EAC. She also holds additional responsibilityas Group Head, Corporate Banking, covering the Ecobank Group of CorporateClients. She holds a BA (Hons) in Economics from the University of Kent, Cantebury,UK and an MA Economics from the Université de Grenoble, France.

Evelyn Tall Non Executive Director

Evelyne Tall is currently the Chief Operating Officer of the Ecobank Group. Priorto that she was the Executive Director for Domestic Banking for the Group aswell as the Regional Head for the Francophone West Africa Region. She startedher career in 1981 with Citibank in Dakar. She left Citibank to join Ecobank Malias Deputy Managing Director in 1998, and was made Managing Director in 2000.She was later transferred to Ecobank Senegal as Managing Director. She wasappointed Regional Head of the Francophone West Africa Region in October 2005.Evelyne Tall holds a Bachelor's Degree in English (Dakar) and a diploma inInternational Trade, Distribution and Marketing from Ecole d'Administration etde Direction des Affaires, Paris.

Awuraa Abena Asafo-Boakye Company Secretary

Awuraa Abena Asafo-Boakye is the Company Secretary and Head of the LegalDepartment. She has been with Ecobank Ghana Limited since 1996 and has heldvarious positions including Head, Human Resources. Prior to this, she worked asa Legal Practitioner at Sena Chambers, a leading law firm in Ghana. AwuraaAbena holds an LLB degree as well as an Executive MBA (finance) degree fromthe University of Ghana, Legon.

Highlights

2010 2009At 31 December GHS '000 GHS '000

Total assets 1,521,229 1,386,874Total loans and advances (net) 496,043 456,159Total deposits 1,116,332 922,077Shareholders’ equity 227,646 206,902

For the year ended 31 December Profit before tax 90,709 72,689Profit after tax 60,117 53,853

Dividend per share (Ghana pesewas) 20 18Earnings per share (Ghana pesewas)- Basic 26 26- Diluted 26 26Return on average equity (%) 28 37Return on average assets (%) 4.1 4.7

At 31 DecemberNumber of staff 890 841Number of branches 52 52

Domestic Bank

Domestic Bank is responsible for the Consumer, SME, localCorporate, Public Sector including local and centralgovernments businesses and Transaction Bank

Our GoalOur goal is to deliver reliable and accessible products andservices to our target market that promote the bank'svision of being a world class pan-African bank.

StrategyIn 2010, the focus of the Domestic bank was in five keyareas;• Growing Deposits, especially NIBs• Growing Fee and Commission Income• Reducing Non Performing Loan Ratio• Creation of Good Quality Assets• Enhancing Customer Loyalty

Small and Medium Scale EnterprisesSME unit focuses on commercial enterprises that fit itsdescription with particular attention to the unique needsof this versatile and dynamic section of our economy. Thestrategy of the SME unit has always been to respond withequally dynamic and unique solutions to our SME clientele,as we partner in our common aspirations of growth andprofitability. In this vein, we devoted greater efforts tothe following;• Trade products,• Receivables financing and• Short term facilities.

During the year a risk sharing agreement with theInternational Finance Corporation to improve SME's accessto credit was implemented.

The SME Unit will continue to play a vital role in ourstrategic focus in the year 2011.

Consumer and Private BankingThe consumer bank serves the needs of our householdand individual customers. Various products and servicesare designed to meet the needs of this segment of themarket and to ensure that their banking experience isdelightful. Together with our support unit such as theCustomer Analytics Unit, the Leasing Unit, the MortgagesUnit and the Remittances Unit (which ensures that fundstransfer are made and received in a timely and efficientmanner) we ensure that our clients are offered worldclass banking services in all our branches.

Public SectorThis unit champions the deposits mobilization drive ofthe bank. The focus of the public Sector Unit is to providekey and strategic solutions to local and Central governmentinstitutions. In 2010 the key strategy was to grow theliability business through• Retention and growth in accounts

• Diversification of target market to include regional, municipal and district accounts where EGH's branch network is present

• Aggressive marketing for project accounts from both government and donors to attract mass deposit.

• Cross sell products to deliver solutions that will captureNIBs and LIBs

Local CorporateThe local Corporate Unit is strategically positioned to servethe special needs of our large local companies. Duringthe year, the unit aggressively made inroads into the oilsector through the provision of financing for key companiesin the sector.

Domestic Bank in 2011Our pursuit of portfolio and profit growth will revolvearound prudent risk management to maintain optimumportfolio quality and minimize asset delinquency. Withthe technical support of our Transaction Bank Unit we aimat providing relevant products and services to our customersDeposit mobilization will remain a priority and is set tosee vibrant activity in 2011.

Business review

In line with our strategy ofproviding tailor-made solutionsto our customers in a timely andefficient manner, our Businessunits have been segmented intoDomestic Bank, Ecobank Capitaland Corporate Bank.

Capital

GoalTo be market makers on both foreign exchange andmoney markets, providing tailor-made solutions to supportclient businesses whilst delivering healthy returns to thebank.

StrategyThe strategy in 2010 was to significantly increase treasuryincome through;• Efficient balance sheet management• Aggressive marketing• Competitive pricing and• Excellent client relationship management

Working closely with our corporate and domestic bankingunits we were able to deliver on this strategy.

Fixed Income SecuritiesThe first half of 2010 saw relatively higher yields ongovernment securities. We took advantage of this togrow our Fixed Income portfolio.

Equity InvestmentsOur equity book bounced back slightly following the gainsmade on the Ghanaian bourse this year. We took advantageof this to rebalance our portfolio with the view tomaximizing returns.

CurrencyOur aggressive marketing efforts paid off leading toincreased inflows in both local currency and foreigncurrency. With our strategy of offering competitive pricingwe were able to keep our heads above water in a ratherchallenging Foreign Exchange market.

Treasury in 2011In 2011 we will continue to focus on increasing treasuryincome through prudent balance sheet management,competitive pricing and a strong focus on marketing.Active fixed income trading and continuously seeking outlow cost deposits coupled with high returns on placementson both local and foreign markets; will further enhanceour performance in 2011.

Corporate Bank

The new Corporate Bank recognizes the need for acentralized sales process, product development & deliveryand client segmentation to take account of differences incustomer needsThe Corporate Bank (CB) is organized into six (6) unitsnamely:• Multinationals• Regional Corporates• Public Sector• International Organizations• Financial Institutions and• Corporate Products (Transaction Banking).

Within the new Corporate Bank model, client managementis achieved with the active collaboration of Domestic Bankand Ecobank Capital as key partners.

Sales StructureThe sales structure is segmented into Global AccountManagers (GAMs), Regional Account Managers (RAMs)and Local Account Managers (LAMs). These are interlinkedand interdependent on each other for network revenuegeneration with the client needs at the centre.

Our StrategyOur strategy for 2010 included;• Providing end-to-end solutions through

value chain financing• Quick turnaround time on delivery• Leverage on our regional network• Liquidity Pooling across the cluster• Cross Border/Regional currency Solutions

Corporate Bank in 2011Corporate Bank will continue to focus on creating superiorvalue for the bank's customers through the provision offinancial and business solutions.We will continue to make sure that our solutions arerelevant to the unique needs of our clients, there bydeepening existing relationships and pursue new leads.

Business review (Continued)

Chairman’s Address

Valued Shareholders,I am pleased to welcome you tothe Annual General Meeting of ourbank, Ecobank Ghana Limited andto present the Annual report andAccounts for the year endedDecember 31, 2010.

My first annual statement asChairman comes at a time of whathas been another successful yearfor Ecobank Ghana. It has been ayear of consolidation and also ofachievement as our bank continuesto position itself for what promisesto be a growth momentum for ourcountry and bank for the nextfew years.

Macro- Economic EnvironmentLet me first give you a brief overview of the macroeconomicenvironment in which your Bank operated during the year.

Thus far, economic recovery is proceeding broadly as expected,although downside risks remain elevated.

According to the IMF's World Economic Outlook, most advancedand a few emerging economies still face major adjustments,including the need to strengthen household balance sheets,stabilize and subsequently reduce high public debt, and repairand reform their financial sectors. In many of these economies,the financial sector is still vulnerable to shocks and growth appearsto be slowing as policy stimulus wanes.

By contrast, in emerging and developing economies, prudentpolicies implemented partly in response to earlier crises, havecontributed to a significantly improved medium-term growthoutlook relative to the aftermath of previous global recessions.

Economic activity in Sub-Saharan Africa is projected to expand byabout 5 percent in 2011. Should this prevail, economic growthin most countries in the region would have effectively bouncedback to close to the high levels registered in the mid-2000s.

The region's resilience through the global financial crisis holdsmuch to sound economic policy implementation. Before the 2007-09 global shocks, most of the region's economies were in goodshape. There was steady growth, declining inflation, sustainablefiscal balances, rising foreign exchange reserves and reducinggovernment debt. When the shocks hit, countries were able touse fiscal and monetary policies nimbly to dampen the adverseeffects of the sudden shifts in world trade, commodity prices,and financial flows.

The Ghanaian economy has generally been marked by strongermacro-economic fundamentals as compared to 2009. Inflationhas consistently been on the decline ending the year at 8.58%,the lowest since June 1992 when it stood at 8.4%. The Cedi hasbeen relatively stable against most of the world's major currenciesand a provisional GDP growth of 5.9% was recorded for the halfyear 2010. The estimated growth for year end 2010 is alsoforecasted at 5.9%.

This performance coupled with the onset of commercial productionof oil from the 15th of December, 2010; contributed to increasedinvestor confidence. The international rating company Fitchupgraded Ghana's ratings outlook to Stable (B+) from Negative,reflecting economic stabilization due to tight fiscal and monetarypolicy.

Consistent Performance in a Changing Industry.

Lionel Van Lare Dosoo (Chairman)

Overall, the prospects for the country are promising.Increased economic activity in the face of the oil find aswell as the government commitment to maintainmacroeconomic stability and infrastructural developmentwhile ensuring growth is expected to lift the country tohigher levels of growth in 2011

Financial Performance HighlightsLadies and Gentlemen, I am pleased to inform you thatdespite increased competitiveness in the industry, wewere able to leverage on our strong brand and the loyaltyof our esteemed customers to grow our profits before taxby 24% in Ghana cedi terms.

We achieved this performance due to increased levels onalmost all our income streams especially Net InterestIncome. In 2010, as a result of the general stability of theeconomy as well as the declining returns on Governmentof Ghana Treasury Bills, our strategy was to grow ourInterest Income through the creation of good qualityassets.

This strategy paid off as our Net Interest Income grew by32% from GHS82.45Million to GHS109.06 Million, whileNet Fee Income was up by 2.1% As a result of diminishingspreads arising from the relative stability of the Cedi tothe major currencies in 2010, Net Trading Income declinedby 28% in 2010.

Our prudent cost management measures yielded positiveresults; indeed we recorded a cost income ratio of 46%an improvement over last year's ratio of 49%. OurOperating cost was up by 8%.

These developments translated into an increase of about25% in Profit before Tax (PBT) from GH¢72.68 million in2009 to GH¢90.7 million in 2010.

The Bank's Balance Sheet grew by 10% from GH¢1.38Billion to GH¢1.52 billion at year end 2010, an indicationof our proclivity to remain resilient in the face of increasedcompetition and to take advantage of positive trends inthe macroeconomic environment.

Asset-mix continues to be healthy, balancing liquidity andprofitability. The loan portfolio grew by 9% from GH¢456million to GH¢496million over the period.

Our deposit mobilization initiatives resulted in a depositgrowth of 21% from GHS922Million to GHS1.11billion.The growth depicts the confidence of the banking publicin our Bank.

DividendsOur impressive performance cannot be fully celebratedwithout a corresponding reward to you, Shareholders. Inlight of these good results, the Board of Directors isproposing a dividend payment of 20 Ghana Pesewas pershare for a total dividend payment of GH¢46.1Million.This will represent a payout ratio of 90% of profit aftertax and after transfer to statutory reserves.

Our Social ResponsibilityThis year, we celebrated our 20th anniversary, markingtwo decades of banking leadership. In recognition of theimmense contribution of society to our success we markedour celebration with community service and donations tothe Ridge Hospital.

The Ridge Hospital was not the only health institutionthat benefited from our support, other health institutionsincluded the College of Health Sciences, the Ministry ofHealth in respect of Cervical Cancer, University of GhanaMedical School, Global Fund to fight Aids, Tuberculosisand Malaria, Korle-bu Teaching Hospital in respect of thedevelopment of a kidney transplantation and the GhanaAssociation of the Blind. A number of individuals werealso sponsored to undertake various medical trainingprogrammes throughout the year.

To mark the great input of our farmers to the growth anddevelopment of the nation, we also co-sponsored theNational Farmers Day celebrations.

We also made donations to associations such as ChosenVessels Choir, Village of Hope, Full Gospel International,Joyful Way Incorporated, and the Achimota Golf Clubamong others

Our Recognition2010 was an exciting year for Ecobank Ghana. Our strongbusiness fundamentals, delivery of quality service andfinancial successes continue to receive both domestic andinternational recognition.

At the 9th Banking Awards organized by the CorporateInitiative of Ghana, Ecobank Ghana was adjudged the“Best Bank in Trade Finance”. The Bank was also adjudgedthe 1st Runner up in “Product Innovation” and 2nd Runnerup in the “Best Growing Bank” category.Ecobank Ghana also won “Bank of the Year” by CharteredInstitute of Marketing Ghana (CIMG) for 2009.The Bank was ranked 4th on the 2009 Ghana Club 100listing released on the 14th of September 2010On the international front, Ecobank Ghana was adjudgedthe Bank of the Year in Ghana for 2009 at the annualBankers Award organized by the Financial Times, London.

Chairman’s Address (Continued)

AcknowledgementI wish to thank you our esteemed shareholders and pledgethat our commitment to you is always to strive to maximizethe returns on your investment. Let me also express ourgratitude to our customers who are at the heart of ourbusiness and have kept faith with us and continue to giveus the opportunity to do business with them. We recognizethat, only by focusing on the needs of our customers andoffering products and services that address them, can weexpect to be successful and deliver benefits to ourstakeholders. We also say a big “thank you” to our strongManagement team and staff whose collective hard work,dedication and efficiency has propelled the Bank's growth.They have held their own in the fast-paced competitiveenvironment and deserve commendation.

Ecobank Ghana is in a leading position in the market witha recognized brand. We have the opportunity to furtherinvest in products, services, systems and training to offerunparalleled choice and service to our customers. Theresolve to focus on core markets, customers, cost efficiencyand prudent funding profile should enable the Bank tocontinue to deliver good growth and earning toshareholders while achieving its aim to be recognized asthe Best Financial institution of its kind.

My fellow Board members and I are committed to makingsure that governance structures, as important as they are

to the financial industry is at the forefront of our Bank'soperation and development. We will continue to ensurethat the integrity of the Bank in such areas as CorporateStrategies, Financial Controls, Reporting Systems andInternal Audit Standards are complied with. Our compliancewith the financial stability objectives of the Central bankwill not be compromised

Chairman’s Address (Continued)

I thank my colleagues on the Board forbeing focused and dependable. Theyhave been supportive in providing thedrive and direction needed for thegrowth of your Bank.

Finally I give thanks to God Almightyfor the strength and wisdom He hasprovided us in steering our Bank to suchgreat heights.

Thank you for your attention and Godbless us all.

The Domestic EconomyOn the local front, the economy has been relatively stable.Government's sound fiscal and monetary policies helped improvethe macro-economic stability achieved at the end of last year.

InflationGhana attained single digit inflation of 8.58% at end 2010 belowthe government year end target of 9.2%. Inflation had experienceda consistent decline throughout the year. On the back of thestability of the cedi, improved food production and generalimprovement in global economic conditions, inflation decreasedfrom 15.97% as at end December 2009 to 8.58% as at end,December 2010, a decline of 739 basis points year on year.The downward pressure on inflation can be attributed to boththe food and non-alcoholic beverages group and the non-foodgroup. The food and non-alcoholic beverages group recordedsingle digit inflation rates throughout the year,( declining from11.84% in December 2009 to 4.5% in December 2010) whilstnon-food inflation rate, though declining has been recordingdouble digit inflation rates (from 18.82% in December 2009 to11.22% in December 2010)

Interest RatesIn tandem with the disinflationary process the Central bankreduced its policy rate from 18% at end 2009 to 13.5%, as atend 2010, a reduction of 450 basis points year to date. On thewhole, there were three downward reviews of the policy rate inthe year.In response to the downward trend in the Monetary Policy Ratetrend, most banks reduced their base rates by varying margins.Ecobank Ghana ended the year with a base rate of 24.25%compared to a rate of 29.5% at end 2009, a total reduction of525 basis points.

Treasury bills witnessed a consistent downward decline throughout2010. The 91 day Treasury bill closed the year at 12.26% p.a.down from 22.53% p.a. at end of 2009 and is likely to declinefurther as the focus of the central bank remains inflation targeting.

Exchange RatesThe cedi also remained fairly stable against the three majorcurrencies throughout the year.

Improved export earnings as a result of increased price andvolume of gold and cocoa and favourable developments in theexternal accounts together with the re-alignment of currenciesin the international markets resulted in a stability of the GhanaCedi against the three major currencies.

The Ghana Cedi depreciated marginally by 1.34 per cent againstthe US dollar during the period while appreciating by 2.62

Managing Director’s Statement

Samuel Ashitey Adjei (Managing Director)

Dear Shareholders,Ecobank Ghana is on its way tobecoming a world class Pan AfricanBank, providing world class servicesto its customers across the continent.2010 was an exciting year for usbecause we celebrated 20 years ofbanking leadership in Ghana. Wehave come a long way; from a onebranch merchant bank to one of thebest and biggest commercial banksin the country today. For this wesay a big thank you to our valuedshareholders for keeping faith withus through the years.

I am pleased to present to you ouroperational activities for the year2010 and repor t on yourinvestments with us.

Twenty years of Banking Leadership

per cent and 6.7 per cent against the Pound Sterling andthe Euro respectively.

Real GDP growthThe first ever provisional GDP growth figures were releasedby the Statistical Service. It recorded a provisional GDPgrowth outturn of 5.9% for the period January to June2010. The services sector had displaced agriculture as thebiggest contributor to national income.

After completion of its work on the rebasing of the nationalaccounts, the Ghana Statistical Service revealed that Ghanahas achieved Middle income status according to theBretton Woods Index, with a per Capita income of aboveUS$1,000. With 2006 as the new base year, the rebasedeconomy has grown by 60 percent, while the provisionalestimate puts per capita Gross Domestic Product (GDP)at US$1,318.36, against the previous estimate of US$753.

Banking Industry OverviewThe banking terrain continues to be competitive and highlycharacterized by aggressive marketing of retail and e-banking products and services. The total number of playersremained unchanged at 26 banks.

The Bank of Ghana Credit Conditions Survey conducted inNovember 2010 revealed that small and medium scaleenterprises access to credit and long term credit increasedfor the first time in 2010. This development helped toimprove overall credit conditions in the last quarter of2010.

Expectations regarding general economic activities,competition among commercial banks and reductions inmargin for average loans contributed to the net easingof credit. However credit stance on mortgage financecontinued to tighten.

ECOBANK GHANA LIMITEDFinancial Performance BriefsStrong financial performance was achieved in 2010. Profitbefore Tax (PBT) grew by about 25% from GH¢72.68million in 2009 to GH¢90.7 million in 2010.

Our asset base also recorded a 10% growth fromGH¢1.38billion at December-end 2009 to GH¢1.52 billionat December-end 2010.

LendingTotal non-bank outstanding portfolio increased by 8% ofthe total portfolio value from GHS456Million in 2009 toGHS496Million in 2010. Redoubled efforts at recovery ofadversely classified loans yielded positive results as nearly48% of classified credits were recovered by end of year2010 (23% in 2009).

Cost ManagementWhile revenues grew by about 13%, the rise in totaloperating costs was modest at 8% as a result of effectivecost management.

These efforts amongst others culminated in a healthy costincome ratio of 46 %, a reduction over the 2009 ratio of49%, about the best in the industry.

Risk ManagementOur Risk Management Strategy continued to focus onbuilding a well diversified, well managed risk portfolio indefined target markets to generate high return on capital.

Growth and Market PresenceWe rolled out a total of 27 ATMs during the year, bringingour total number of ATM's to 121 countrywide. IndeedEcobank launched the first ever ATM Plaza in the countryat the University of Ghana, Legon during the year.In our relentless quest to provide our customers withinnovative products and services, we introduced an instantmobile money transfer service onto the Ghanaian marketin collaboration with Airtel. The product, known as 'EcobankMobile Banking with Zap' allows Airtel customers to usetheir mobile phones via a mobile wallet to pay utility billsand also goods and services and to also transfer fundsfrom one Ecobank account to another.Furthermore, we expanded our range of existingInternational Money Transfer Products; to include twomore exciting products; our own Ecobank Rapid Transferand the MoneyGram Money Transfer product.The Ecobank Rapid transfer product is an instant MoneyTransfer Product which provides a fast, convenient andreliable way to transfer money across and within countrieswhere Ecobank is present.

This product is a perfect model of successful AfricanIntegration.

China BusinessIn recognition of the growing importance of trade betweenAfrica and China, our Parent Company, Ecobank

Managing Director’s Statement (Continued)

Transnational Incorporated, signed an agreement withthe Bank of China for the establishment of dedicateddesks for Chinese businesses in all its affiliates.Ecobank Ghana has pioneered this initiative by receivingthe first batch of representatives from the Bank of Chinato man our China desk. They will be bringing to the bankthe requisite expertise and cultural understanding necessaryto develop and enhance our relationship with Chinesecompanies operating in the country. This mutuallybeneficial relationship will enable the Bank of China tocater more pointedly to their clients in Africa using theEcobank platform, and also enables us to grow our Chinabusiness

20th Anniversary CelebrationLadies and Gentlemen, as mentioned earlier we celebrated20 years of Banking in March 2010 under the theme“Twenty years of Banking Leadership”. In recognition ofthe vital role that society has played in our success wemarked the celebration with a clean up exercise anddonations to the Ridge hospital in Accra. We also tookthe opportunity to reward our loyal employees who havebeen in the service of the bank for all these years.

We did not forget our shareholders and customers whohave been the main drivers of our success. AShareholder/Customer Appreciation dinner was held intheir honour as part of the celebrations. We believe thatyou, our valued shareholders are also our customers.

Employee Related IssuesWe are a demanding organization whose employeesexceed even our own high expectations. In 2010, weasked even more from them. It required an enormouscommitment of time and energy, but our employeessucceeded in moving us closer to our goal of being aWorld Class Pan African Bank.

As a result, we are committed to ensuring that ouremployees are well trained and adequately compensated.Various training programmes were organized throughoutthe year to equip staff with the requisite skills andknowledge necessary for their various roles.

We also continued with our practice of providingemployment to the country's fresh crop of graduates. Atotal of 76 national service persons who had been on aninternship programme with the bank were converted tofull time staff during the year.

OUTLOOK FOR 2011Looking ahead, we aim at being a World Class Pan AfricanBank, measuring up in terms of service delivery, financialindicators and human resource, to the top internationalbanks the world over.We will take advantage of the opportunities presentedby the oil find and establish ourselves as the bank ofchoice for oil transactions in the country.

With the current stability of the Ghanaian economy, theprospects for the banking industry are bright. EcobankGhana is well positioned to take advantage of theseopportunities and becoming a strategic partner to thegrowth and development of Ghana.

Managing Director’s Statement (Continued)

AcknowledgementWe are profoundly grateful to ourshareholders and customers who haveshown us incredible loyalty and support.They have reinforced our determinationthat, in operating our businesses, theneeds of our shareholders and clientswill always come first.

We believe our progress in 2010 haspositioned us to deliver new andsubstantial value to shareholders. Thatis our ultimate purpose and mostimmediate objective.

We are very thankful to the entire staffwhose dedication and head workresulted in our continued success in theyear. Our goal is to be a more client-driven organization, more accessibleand innovative,

We are grateful to God for a verysuccessful Year.

Thank you all.

The directors submit their report together with the audited consolidated financial statementsfor the year ended 31 December 2010.

Statement of Directors’ Responsibilities

The directors are responsible for the preparation ofconsolidated financial statements for each financial yearwhich give a true and fair view of the state of affairs ofthe Bank and its subsidiaries and of the Income statement,statement of comprehensive income, statement of changesin equity, cash flow statement and balance sheet for theyear. In preparing these consolidated financial statements,the directors have selected suitable accounting policiesand then applied them consistently, made judgementsand estimates that are reasonable and prudent, andfollowed International Financial Reporting Standards and

with the requirements of the Companies Code, 1963 (Act179) and the Banking Act, 2004 (Act 673) as amendedby the Banking (Amendment) Act, 2007 (Act 738).

The directors are responsible for ensuring that the Bankand its subsidiaries keep proper accounting records thatdisclose with reasonable accuracy at any time the financialposition of the Bank and its subsidiaries. The directorsare also responsible for safeguarding the assets of theBank and its subsidiaries and taking reasonable steps forthe prevention and detection of fraud and otherirregularities.

Principal activities

The Bank’s principal activities comprise corporate banking, investment banking and retail banking.The Bank's subsidiaries and associate provide the following services;

Ecobank Investment Managers Limited - management of investments

Ecobank Leasing Company Limited - finance lease facilities

Ecobank Venture Capital Company Limited - venture capital

EB Accion Savings & Loans Company Limited - microfinance for small and medium scale enterprises

Report of the Directors

Report of the Directors (Continued)

The results for the year are set out below:

Group2010 2009

GH¢’000 GH¢’000Profit after tax (attributable to equity holders) 60,117 54,720to which is added balance on income surplusaccount brought forward of 59,041 41,619

119,158 96,339out of which is transferred to statutory reserve fundrequired by Section 29 of the Banking Act, 2004,Act 673 as amended by the Banking Amendment Act2007 (Act 738) and Non Bank Financial InstitutionsBusiness Rule 5 for Ecobank Leasing Company Limited (7,326) (6,689)

Bonus share issue, - (4,100)

transfer from regulatory credit risk reserve, 563 65release of subsidiary regulatory credit reserve 42 -reserves of previously consolidated subsidiary with minority interest 1,552 -prior year's dividend paid, and (41,423) (26,574)leaving a balance to be carried forward 72,566 59,041

DividendThe directors recommend the payment of a dividend of20 Ghana pesewas per share (2009: 18 Ghana pesewasper share).

Parent companyThe Bank is a subsidiary of Ecobank TransnationalIncorporated (ETI), a company incorporated in the Republicof Togo. The ultimate company, ETI, owns 87.8% of theissued ordinary shares of the Bank.

AuditorIn accordance with Bank of Ghana’s directive dated 11January 2011, we are required to change our currentauditors, PWC. We will be duly guided by Section 134 ofthe Companies Code, 1963 (Act 179).

signedSamuel Ashitey AdjeiDirector

signedLionel Van Lare DosooDirector

Date:18 February, 2011

By Order of the Board

Corporate Governance

Commitment to Corporate GovernanceAs a member of the Ecobank Group, Ecobank Ghana andits subsidiaries operate according to the EcobankTransnational Incorporated (ETI) Group principles andpractices on corporate governance. These principles andpractices are guided by the Basel Committee standardson corporate governance which constitutes the best ofinternational practice in this area.

The key guiding principles of the Group’s governancepractices are:

(i) good corporate governance enhances shareholder value;

(ii) the respective roles of shareholders, Boards of Directors and management in the governance architecture should be clearly defined; and

(iii) the Boards of Directors should have majority membership of Independent directors, defined broadlyas directors who are not employed by the Group or company, or who are not affiliated with organizationswith significant financial dealings with the Group.

These principles have been articulated in a number ofcorporate documents, including the Company regulations,a corporate governance charter, rules of procedures forBoards, a code of conduct for Directors, and rules ofbusiness ethics for staff.

The Board of DirectorsThe Board is responsible for setting the institution’sstrategic direction, leading and controlling the institutionand monitoring activities of the executive management.

As of 31 December 2010 the Board of Directors of EcobankGhana consisted of eight members made up of anindependent Non-Executive Chairman, four (4) Non-Executive Directors, three (3) of whom are independent,and three (3) Executive Directors. The board membershave wide experience and in-depth knowledge inmanagement, industry, financial and capital marketswhich enable them make informed decisions and valuablecontribution to the Group's progress. The Board met fivetimes during the year.

The Board has delegated various aspects of its work tothe Governance, Audit and Compliance, Risk Managementand Building committees:

The Board has adopted standard evaluation tools to helpassess annually the performance of the Board, itscommittees and individual members.

Governance CommitteeThis Committee is chaired by Mr. Lionel Van Lare Dosoo(the independent non-executive Board Chairman) andhas as its members Mr. Kofi Ansah and Mr. Samuel AshiteyAdjei. The Committee met twice in the year ended 31December 2010.

The role of the committee includes:• Handling relationship with regulators and third parties;• Handling relationships with shareholders;• Evaluating periodically the Board and its Committees;• Reviewing all issues relating to good governance and;• Reviewing and recommending the appointment

of directors and their remuneration.

The role of the Governance Committeewith regards to Human Resources includes:• Review the organisational structure of the bank in line

with the standard Group structure.• Review criteria (in line with Group policies) for

recruitment of staff. • Review human resources management policy (in line

with Group Human Resources policies). • Review and recommend the employment of

management for approval for full Board and evaluatetheir performance.

• Recommend disciplinary actions against erring management staff.

• Recommend promotions of management staff • Recommend appropriate levels of remuneration and

structure of packages for staff • Review the succession plan for key positions. • Any other responsibilities as may be assigned

by the Board.

Audit and Compliance Committee The Audit and Compliance Committee has as its chairpersonMrs. Mariam Gabala Dao, an independent non-executiveDirector and includes all other non-executive membersof the Board. The Managing Director and a representativeof the external auditors sit in attendance. The Committeemet five times in the year ended 31 December 2010.

The role of the committee include:• Review of internal audit function and mandate audit

activities;• Review of internal and external audit reports,

particularly reports of regulatory and monetary authorities and supervise the implementation of theirrecommendations;

• Facilitate dialogue between auditors and managementregarding outcomes of audit activities;

• Propose external auditors and their remuneration;• Work with external auditor to finalise annual financial

statements before full board approval;• Review the Dividend Policy and issues relating to the

constitution of reserves; • Review the quarterly, half-yearly and annual financial

results before the Board's review and approval; •Set up procedures for selecting suppliers, consultants and other service providers and ensure their compliance by Management;

• Organise periodic discussions with the Departments ofInternal Audit and Financial Control;

• Define appropriate measures to safeguard the assets of the Company;

• Ensure compliance with all applicable laws and regulations and operating standards;

• Review, approve and follow up major contracts, procurement and capital expenditure;

• Review actual spending against budget; and• Review and approve proposals for extra-budgetary

spending.

Risk Management Committee This committee has as its Chairman Mr. Lionel Van LareDosoo the independent and non-executive Board Chairman.Other members are Mr. Kofi Ansah and the ManagingDirector. The committee met five times in the year ended31 December 2010 to review reports from the RiskManager.

The role of the committee include:• Approve all credits within limits defined in Group Credit

Policy, and within the statutory requirements set by the respective regulatory and supervisory authority;

• Review and endorse credits approved by the executivemanagement;

• Review and recommend to the full Board credit policychanges initiated by executive management;

• Ensure compliance with the bank’s credit policies and statutory requirements prescribed by the regulatory and supervisory authorities;

• Review periodic credit portfolio reports and assess portfolio performance;

• Approve exceptions, write-offs and discounts of non-performing credit facilities;

• Review audit reports with respect to compliance with and implementation of Risk Management Policy; and

• Review all other risks including technology, market, insurance, reputation and regulations.

Building CommitteeThe Board also has an ad-hoc Building Committee whichsupervises the management of new building projects.This committee is chaired by Mr. Kofi Ansah anindependent, non-executive Board Member with supportfrom Mr. Samuel Adjei. The committee met once duringthe year.

Corporate Governance (Continued)

Business Continuity Plan The Group has a business continuity and disaster recoveryplan for its Head Office and branches that will enable itto respond to any unplanned significant interruption inits essential business functions that can lead to a temporarysuspension of its operations. It provides guidelines to fullyrecover operations and ensure coordinated processes ofrestoring systems, data, and infrastructure to enableessential client needs to be met until normal operationsare resumed. The plan is tested at least three times everyyear to assess the readiness of the Group to respond tounplanned interruptions of its operations.

Systems of Internal ControlThe Group has a well-established internal control systemfor identifying, managing and monitoring risks. These aredesigned to provide reasonable assurance that the risksfacing the Group are being controlled.

The corporate internal audit and compliance function ofthe Group plays a key role in providing an objective viewand continuing assessment of the effectiveness of theinternal control systems in the business. The systems ofinternal controls are implemented and monitored byappropriately trained personnel, with clearly definedduties and reporting lines.

Code of Business EthicsManagement has communicated the principles in theGroup’s Code of Conduct to its employees in the dischargeof their duties. This code sets the standards ofprofessionalism and integrity required for the Group’soperations which covers compliance with applicable laws,conflicts of interest, environmental issues, reliability offinancial reporting, bribery and strict adherence to laiddown principles so as to eliminate the potential for illegalpractices.

Anti-Money LaunderingThe Group also has an established anti- money launderingsystem in place in compliance with the requirements ofGhana’s Anti-Money Laundering Act 2008. These includedue diligence for new accounts, customer identification,monitoring of high risk accounts, record keeping andtraining and /or sensitisation of staff on anti-moneylaundering which would assist in reducing regulatory andreputational risk to its business.

Staff members have been trained on anti-moneylaundering policies and an anti-money laundering registeris kept at all branches.

Corporate Governance (Continued)

REPORT ON THE FINANCIAL STATEMENTSWe have audited the accompanying financial statementsof Ecobank Ghana Limited (the Bank) and its subsidiaries(together, the Group) as set out on pages 22 to 67. Thesefinancial statements comprise the consolidated balancesheet as at 31 December 2010, the consolidatedincome statement, consolidated statement ofcomprehensive income, consolidated statement ofchanges in equity and consolidated cash flow statementfor the year then ended together with the balance sheetof the Bank standing alone, as at 31 December 2010, theincome statement, statement of comprehensive income,statement of changes in equity and cash flow statementof the Bank for the year and a summary of significantaccounting policies and other explanatory information.

Directors’ responsibility for the financial statementsThe directors are responsible for the preparation of financialstatements that give a true and fair view in accordancewith International Financial Reporting Standards and withthe requirements of the Companies Code, 1963 (Act 179)and the Banking Act, 2004 (Act 673) as amended by theBanking (Amendment) Act, 2007 (Act 738) and for suchinternal control, as the directors determine is necessaryto enable the preparation of financial statements that arefree from material misstatement, whether due to fraudor error.

Auditor's responsibilityOur responsibility is to express an opinion on the financialstatements based on our audit. We conducted our auditin accordance with International Standards on Auditing.Those standards require that we comply with ethicalrequirements and plan and perform the auditto obtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the financialstatements. The procedures selected depend on theauditor’s judgement, including the assessment of the risksof material misstatement of the financial statements,whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevantto the entity’s preparation of financial statements thatgive a true and fair view in order to design audit proceduresthat are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness ofthe entity’s internal control. An audit also includesevaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimatesmade by the directors, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

OpinionIn our opinion, the accompanying financial statementsgive a true and fair view of the financial position of theBank and the Group as at 31 December 2010 and of itsfinancial performance and its cash flows for the year thenended in accordance with International Financial ReportingStandards and in the manner required by the CompaniesCode, 1963 (Act 179) and the Banking Act, 2004 (Act 673)as amended by the Banking (Amendment) Act, 2007 (Act738).

REPORT ON OTHER LEGAL REQUIREMENTSThe Companies Code, 1963 (Act 179) requires that incarrying out our audit we consider and report on thefollowing matters. We confirm that:

i) we have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purposes of our audit;

ii) in our opinion, proper books of account have been kept by the Company, so far as appears from our examination of those books; and

iii) the consolidated balance sheet and consolidated profitand loss account are in agreement with the books ofaccount.

In accordance with section 78(2) of the Banking Act 673,2004 we hereby confirm that;

i) we were able to obtain all the information and explanations required for the efficient performance ofour duties as auditors;

ii) in our opinion, the accounts give a true and fair viewof the state of the Bank’s affairs and its results for theyear under review; and

iii) in our opinion, the bank’s transactions were within its powers.

Chartered Accountants28 February 2011Accra, GhanaOseini Amui (100844)

Report Of The Independent AuditorTo The Members Of Ecobank Ghana Limited

Consolidated Income Statement(All amounts are in thousands of Ghana cedis)

Year ended 31 December 2010 Note 2010 2009

Interest income 6 141,526 131,379 Interest expense 7 (32,463) (48,922)Net interest income 109,063 82,457 Fee and commission income 8 43,733 44,204 Fee and commission expense 9 (944) (2,052)Net fees and commission 42,789 42,152 Lease income 10 3,381 5,066 Net trading income 11 20,209 28,148 Dividend income 12 453 448 Other operating income 13 4,267 1,617Total income 180,162 159,888 Impairment charge on loans and advances 14 (5,762) (9,518)Operating expenses 15 (83,742) (77,681)Operating Profit 90,658 72,689 Share of profit of associates 41 51 - Profit before income tax 90,709 72,689 Income tax expenses 16 (26,056) (17,195) National Stabilisation Levy 19 (4,536) (1,641)Profit for the year 60,117 53,853 Attributable to: Equity holders of the parent entity 60,117 54,720 Non controlling interests - (867)

60,117 53,853

Earnings per share for profit attributable to the equity shareholders of the parent entity during the year(expressed in Ghana pesewas per share). Earnings per share Basic 20 26 26 Diluted 20 26 26 The notes on pages 28 to 67 are an integral part of these financial statements.

Year ended 31 December 2010

Note 2010 2009Profit for the year 60,117 53,853Other comprehensive income: Net gains on available for sale investmentsecurities 37 664 382Gains on revaluation of land and buildings 37 - 14,315Income tax relating to components of othercomprehensive income 17 (166) (801)Other comprehensive income for the year, net of tax 498 13,896Total comprehensive income for the year 60,615 67,749Total comprehensive income attributable to: Equity holders of the parent entity 60,615 68,616Non controlling interest - (867)

60,615 67,749The notes on pages 28 to 67 are an integral part of these financial statements.

Consolidated Statement of Comprehensive Income(All amounts are in thousands of Ghana cedis)

Consolidated Balance Sheet(All amounts are expressed in thousands of Ghana cedis unless otherwise stated)

At 31 December, 2010

Note 2010 2009 Assets Cash and balances with Bank of Ghana 21 144,237 104,162 Government securities 22 468,974 268,534 Loans and advances to banks 23 314,235 442,806Trading assets 24 1,851 2,540 Loans and advances to customers 25 496,043 456,159 Investment securities: available-for-sale 26 17,360 24,363 Investment in associates 41 3,959 - Intangible assets 28 2,685 3,630 Current income tax asset 16 1,281 - Property and equipment 29 40,450 44,015 Other assets 30 30,154 40,665 Total assets 1,521,229 1,386,874 Liabilities Deposits from banks 31 69,921 90,127 Customer deposits 32 1,116,332 922,077 Other liabilities 33 27,168 84,703 Current income tax liability 16 - 1,147 Deferred income tax liabilities 17 4,133 908 Borrowings 34 76,029 82,499 Total liabilities 1,293,583 1,181,461 Equity Stated capital 35 100,000 100,000 Income surplus account 36 72,566 59,041 Revaluation reserves 37 15,989 15,491 Statutory reserve fund 38 36,980 29,654 Regulatory credit risk reserve 39 2,111 2,716 Capital and equity attributable to parent equity's equity holders 227,646 206,902Non controlling interest - (1,489)Total equity 227,646 205,413 Total liabilities and equity 1,521,229 1,386,874

The consolidated financial statements on pages 22 to 67 were approved by the Board of Directors on 18 February 2011and signed on its behalf by:

The notes on pages 28 to 67 are an integral part of these financial statements

signedSamuel Ashitey AdjeiDirector

signedLionel Van Lare DosooDirector

By Order of the Board

Consolidated Cash Flow Statement(All amounts are expressed in thousands of Ghana cedis unless otherwise stated)

Note 2010 2009Cash flows from operating activities Interest paid (29,994) (42,681)Interest received 128,477 125,710 Net fees and commissions receipts 42,789 42,152 Other income received 4,267 1,617 Dividend received 453 448 Net trading income 17,232 23,354 Lease income 3,381 4,662 Payments to employees and suppliers (83,743) (69,730)Tax paid (22,720) (19,360)Cash flows from operating activities beforechanges in operating assets and liabilities 60,142 66,172 Changes in operating assets and liabilities Loans and advances (45,646) (54,628)Other assets 10,511 17,651 Investment securities (7,003) (10,819)Customer deposits 194,255 239,372 Other liabilities (86,701) (14,604)Mandatory reserves (29,291) (24,329)Net cash generated from operating activities 36,127 152,643 Cash flow from investing activities Purchase of property and equipment 29 (6,574) (11,418)Purchase of software 28 (560) (2,870)Proceeds from sale of equipment 98 161 Government securities 22 (200,439) (59,180)Net cash used in investing activities (207,475) (73,307 Cash flow from financing activities Dividends paid (41,423) (26,574)Proceeds from rights issue - 79,500 Repayment of borrowed funds 34 (7,373) (9,578)Proceeds from borrowed funds 34 - 21,135 Net cash generated from/(used in) financing activities (48,796) 64,483 Net gain on exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents (160,002) 209,991 Cash and cash equivalents at beginning of year 40 520,368 310,377 Cash and cash equivalents at the end of the year 40 360,366 520,368

The notes on pages 28 to 67 are an integral part of these financial statements.

Consolidated Statement of Changes in Equity(All amounts are expressed in thousands of Ghana cedis unless otherwise stated)

Attributable to equity holders of the Group

Income Statutory Regulatory NonStated Surplus Revaluation Reserve Credit Risk ControllingCapital Account Reserves Fund Reserves Interest Total

Balance at 31 December 2008 16,400 41,619 1,595 22,965 2,781 (622) 84,738Gain on revaluation of buildings, - - 13,599 - - - 13,599Net change in available for saleinvestments, net of tax - - 297 - - - 297Profit for the year - 54,720 - - - (867) 53,853 Total comprehensive income - 54,720 13,896 - - (867) 67,749 Dividend relating to 2008 - (26,574) - - - - (26,574)Transfer to statutory banking reserves - (6,689) - 6,689 - - -Transfer from regulatory credit risk reserve - 65 - - (65) - - Proceeds from shares issued 79,500 - - - - - 79,500Transfer to stated capital 4,100 (4,100) - - - - - Balance at 31 December 2009 100,000 59,041 15,491 29,654 2,716 (1,489) 205,413 Gain on revaluation of buildings,net of tax - Net change in available for saleinvestments, net of tax 498 498 Profit for the year - 60,117 - - - - 60,117 Total comprehensive income - 60,117 498 - - - 60,615Dividend relating to 2009 - (41,423) - - - - (41,423)Transfer to statutory banking reserves - (7,326) - 7,326 - - - Release of subsidiary regulatorycredit reserve - 42 - - (42) - -Transfer from regulatory credit risk reserve - 563 - - (563) - - Reserves of previously consolidatedsubsidiary with minority interest - 1,552 - - - 1,489 3,041 Balance at 31 December 2010 100,000 72,566 15,989 36,980 2,111 - 227,646

The notes on pages 28 to 67 are an integral part of these financial statements

2.1.1 (a) New and amended standards adopted by the GroupThe amendments to existing standards below that are part of the Annual ImprovementsProject 2009 are relevant to the Group’s operations:

Applicable for financial yearStandard Title beginning on/after

IAS 1 Presentation of financial statements 1 January 2010IAS 17 Leases 1 January 2010IAS 36 Impairment of Assets 1 January 2010IFRS 8 Operating Segments 1 January 2010IAS 7 Statement of Cash flows 1 January 2010

Notes(All amounts are expressed in thousands of Ghana cedis unless otherwise stated)

1. General information

The Bank and its subsidiaries together the "Group"provide retail, corporate banking, investment bankingand other financial services in Ghana. EcobankTransnational Incorporated (ETI), the parent companyof Ecobank Ghana Limited holds 87.82% of the issuedordinary shares.

The Bank is a limited liability company and isincorporated and domiciled in Ghana. The address ofits registered office is as follows: Ecobank GhanaLimited, 19 Seventh Avenue, Ridge West PMB GPO,Accra. The Bank is listed on the Ghana Stock Exchange.

The consolidated financial statement for the yearended 31 December have been approved for issueby the Board of Directors on the 18 February 2011.Neither the entity's owners nor others have the powerto amend the financial statements after issue.

2. Summary of significant accounting policies

The principal accounting policies applied in thepreparation of these consolidated financial statementsare set out below. These policies have beenconsistently applied to all the years presented, unlessotherwise stated.

2.1 Basis of presentationThe Group’s consolidated financial statements havebeen prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as issued by theInternational Accounting Standards Board. AdditionalInformation required by Companies Code, 1963 (Act179) and the Banking Act, 2004 (Act 673) as amendedby the Banking (Amendment) Act, 2007 (Act 738) isincluded where appropriate. The consolidated financialstatements have been prepared under the historicalcost convention, except for the revaluation of land

and buildings, financial liabilities held at fair value throughprofit or loss. The consolidated financial statementscomprise available-for-sale financial assets, financial assetsand the consolidated income statement and statementof comprehensive income showing as two statements,balance sheet, the statement of changes in equity, thestatement of cash flow and the notes. The financialstatement of the Group standing alone comprise thebalance sheet, income statement, statement of othercomprehensive income, statement of changes in equityand statement of cash flow.

Items included in the Group’s financial statements aremeasured using the currency of the primary economicenvironment in which the entity operates (‘the functionalcurrency’).

The financial statements are presented in Ghana cedis,which is the Group's functional and presentation currency.The figures shown in the financial statements are statedin thousands of Ghana cedis.

The disclosures on risks from financial instruments arepresented in the financial risk management reportcontained in Note 3.

The preparation of financial statements in conformity withIFRS requires the use of certain critical accounting estimates.It also requires the directors to exercise judgement in theprocess of applying the Group’s accounting policies.Changes in assumptions may have a significant impacton the financial statements in the period which theassumptions changed. The directors believe that theunderlying assumptions are appropriate and that theGroup's financial statements therefore present the financialposition and results fairly. The areas involving a higherdegree of judgement or complexity, or areas whereassumptions and estimates are significant to the financialstatements, are disclosed in Note 5.

Notes (Continued)(All amounts are expressed in thousands of Ghana cedis unless otherwise stated)

IAS 1, ‘Presentation of financial statements’The amendment clarifies that the potential settlement ofa liability by the issue of equity is not relevant to itsclassification as current or non current. By amending thedefinition of current liability, the amendment permits aliability to be classified as non-current provided that theentity has an unconditional right to defer settlement bytransfer of cash or other assets for at least 12 monthsafter the accounting period. The application of theamendment does not have a significant impact on theGroup’s financial statements.

IAS 17, ‘LeasesThe amendment clarifies that when a lease includes bothland and buildings elements, an entity shall assess theclassification of each element as a finance or an operatinglease separately. The application of the amendment doesnot have a significant impact on the Group’s financialstatements.

IAS 36, ‘Impairment of Assets’.The amendment clarifies that the largest cash-generating

unit (or group of units) to which goodwill should beallocated for the purposes of impairment testing is anoperating segment, as defined by paragraph 5 of IFRS 8,‘ Operating Segments’ (that is, before the aggregation ofsegments with similar economic characteristics). Theapplication of the amendment does not have a significantimpact on the Group’s f inancial statements.

IFRS 8, ‘Operating Segments’The amendment removes the requirement to provide ameasure of total assets for each reportable segment.Instead a measure of total assets and total liabilitiesshould be provided if such amounts are regularly providedto the Chief Operating Decision Maker (CODM). Theapplication of the amendment does not have a significantimpact on the Group’s financial statements.

IAS 7, 'Statement of Cash Flows'The Amendment requires that only expenditures thatresult in a recognised asset in the statement of financialposition can be classified as investing activities.

(b) New and amended standards, and interpretations mandatory for thefinancial year beginning 1 January 2010 but not relevant to the Group:

Standard/ Applicable for financialInterpretation Title years beginning on/after

IFRS 1 First-time Adoption of International Financial ReportingStandards -Additional exemptions for first-time adopters 1 July 2009

IFRS 2 (amended) Share-based payment – Group cash-settled share-basedpayment transaction 1 January 2010

IFRS 2 Share-based Payment (part of Annual ImprovementProject 2009) - Scope of IFRS 2 and revised IFRS 3 1 July 2009

IFRS 3 Business combinations 1 July 2009

IFRS 5 Non-current Assets Held for Sale and Discontinued – Operations(part of Annual Improvement Project 2009) Disclosures ofnon-current assets (or disposal groups) classified as held forsale or discontinued operations 1 January 2010

IAS 27 (revised) Consolidated and Separate Financial Statements 1 July 2009

IAS 38 Intangible assets (part of Annual Improvement 1 July 2009Project 2009) – Additional consequential amendments arisingfrom revised IFRS 3 1 January 2010

IAS 39 Financial Instruments: Recognition and Measurement(part of Annual Improvement Project 2009) –(i) Treating loan prepayment penalties as closely related

embedded derivatives(ii) Scope exemption for business combination contracts 1 January 2010

IFRIC 9 & IAS 39 Reassessment of embedded derivatives & Financial Instruments:Recognition and Measurement 30 June 2009

IFRIC 17 Distribution of non-cash assets to owners 1 July 2009

IFRIC 18 Transfers of assets from customers 1 July 2009


FRS 9, ‘Financial instruments part 1: Classification andmeasurement’ and part 2: Financial liabilities andDerecognition of financial instruments

IFRS 9, part 1 was issued in November 2009 and replacesthose parts of IAS 39 relating to the classification andmeasurement of financial assets.

Key features are as follows:

Financial assets are required to be classified into twomeasurement categories: those to be measuredsubsequently at fair value, and those to be measuredsubsequently at amortised cost. The decision is to bemade at initial recognition. The classification dependson the entity's business model for managing its financialinstruments and the contractual cash flow characteristicsof the instrument.

An instrument is subsequently measured at amortisedcost only if it is a debt instrument and both the objectiveof the entity's business model is to hold the asset tocollect the contractual cash flows, and the asset'scontractual cash flows represent only payments ofprincipal and interest (that is, it has only 'basic loanfeatures'). All other debt instruments are to bemeasured at fair value through profit or loss.

All equity instruments are to be measured subsequentlyat fair value. Equity instruments that are held fortrading will be measured at fair value through profitor loss. For all other equity investments, an irrevocableelection can be made at initial recognition, to recogniseunrealised and realised fair value gains and lossesthrough other comprehensive income rather thanprofit or loss. There is to be no recycling of fair valuegains and losses to profit or loss. This election may bemade on an instrument-by-instrument basis. Dividendsare to be presented in profit or loss, as long as theyrepresent a return on investment.

While adoption of IFRS 9 is mandatory from 1 January2013, earlier adoption is permitted. The Group isconsidering the implications of the Standard, the impacton the Group and the timing of its adoption by theGroup.

IFRS 9, part 2 was issued in October 2010 and includesguidance on financial liabilities and de-recognition offinancial instruments. The accounting and presentationof financial liabilities and for derecognising financialinstruments has been relocated from IAS 39, ‘Financialinstruments: Recognition and Measurement’, withoutchange except for financial liabilities that are designatedat fair value through profit or loss.

Under the new standard, entities with financial liabilitiesat fair value through profit or loss recognise changesin the liability’s credit risk directly in othercomprehensive income. There is no subsequentrecycling of the amounts in other comprehensiveincome to profit or loss, but accumulated gains orlosses may be transferred within equity.

Improvements to IFRS

‘Improvements to IFRS’ were issued in May 2010. Theamendments that are relevant to the Group’s operationsrelate to: IFRS 7, ‘Financial Instruments: Disclosures’ andIAS 1, ‘Presentation of financial statements’. Most of theamendments are effective for annual periods beginningon or after 1 January 2011 with early application permitted.

IFRS 7, ‘Financial Instruments: Disclosures’. The amendmentemphasises the interaction between quantitative andqualitative disclosures about the nature and extent ofr isks associated with f inancial instruments.

(c) Standards and interpretations issued but not yet effectiveThe following new standards, amendments to existing standards and interpretations have been issued and are mandatory for the Group's accounting periods beginning on or after 1 January 2011 or later periods and are not expected to be relevant to the Group, except for IFRS 9.

Standard/ Applicable for financialInterpretation Title years beginning on/after

IFRS 1 (amended) First-time Adoption of International Financial ReportingStandards – Limited exemption from comparative IFRS 7disclosures for first-time adopters 1 July 2010

IFRS 9 Financial instruments part 1: Classification and measurement 1 January 2013

IAS 24 (amended) Related party disclosures 1 January 2011

IAS 32 (amended) Financial instruments: Presentation - Classification of rights issue 1 February 2010

IFRIC 14 (amended) IAS 19 – The limit on a defined benefit asset, minimumfunding requirement and their interaction 1 January 2011

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010


IAS 1, ‘Presentation of financial statements’. Theamendment clarifies that an entity must present ananalysis of other comprehensive income for eachcomponent of equity, either in the statement of changesin equity or in the notes to the financial statements.

(d) Early adoption of standardsThe Group did not early-adopt new or amendedstandards in 2010.

2.2 Foreign currency translation

(a) Transactions and balancesForeign currency transactions are translated into thefunctional currency using the exchange rates prevailingat the dates of the transactions or valuation whereitems are re-measured.

Monetary items denominated in foreign currency aretranslated with the closing rate as at the reportingdate. If several exchange rates are available, theforward rate is used at which the future cash flowsrepresented by the transaction or balance could havebeen settled if those cash flows had occurred. Non-monetary items measured at historical costdenominated in a foreign currency are translatedwith the exchange rate as at the date of initialrecognition; non-monetary items in a foreign currencythat are measured at fair value are translated usingthe exchange rates at the date when the fair valuewas determined.

Foreign exchange gains and losses resulting from thesettlement of foreign currency transactions and fromthe translation at year-end exchange rates ofmonetary assets and liabilities denominated in foreigncurrencies are recognised in profit or loss.

All foreign exchange gains and losses recognised inprofit or loss are presented net within thecorresponding item. Foreign exchange gains andlosses on other comprehensive income items arepresented in other comprehensive income within thecorresponding item.

Changes in the fair value of monetary assetsdenominated in foreign currency classified as availablefor sale, are analysed between translation differencesresulting from changes in amortised cost of thesecurity and other changes in the carrying amountof the security. Translation differences related tochanges in the amortised cost are recognised in profitor loss, and other changes in the carrying amount,except impairment, are recognised in othercomprehensive income.Translation differences on performance of theoperating segments, has been identified as the boardof directors.

All transactions between business segments areconducted on an arm’s length basis, with intra-segment revenue and costs being eliminated in headoffice. Income and expenses directly associated witheach segment are included in determining business

segment performance. In accordance with IFRS 8,the Group has the following business segments:Corporate, Domestic and Capital.

2.3 Segment reporting

Operating segments are reported in a mannerconsistent with the internal reporting provided tothe chief operating decision-maker.. The Chiefoperating decision-maker who is responsible forallocating resources and measuring performance ofthe operating segments, has been identified as theboard of directors.

All transactions between business segments areconducted on an arm's length basis, with intra-segment revenue and costs being eliminated in headoffice. Income and expenses directly associated witheach segment are included in determining businesssegment performance. In accordance with IFRS 8,the Group has the following business segments:Corporate, Domestic and Capital.

2.4 Financial assets and liabilitiesAll financial assets and liabilities have to beenrecognised in the statement of financial position andmeasured in accordance with their assigned category.

2.4.1 Financial assetsThe Group classifies its financial assets in the followingcategories: financial assets at fair value through profitor loss; loans and receivables; and available-for-salefinancial assets. Management determines theclassification of its financial assets at initial recognition

(a) Financial assets at fair value through profit or lossThis category comprises two sub-categories: financialassets classified as held for trading, and financialassets designated by the Group as at fair valuethrough profit or loss upon initial recognition.

A financial asset is classified as held for trading if itis acquired or incurred principally for the purpose ofselling or repurchasing it in the near term or if it ispart of a portfolio of identified financial instrumentsthat are managed together and for which there isevidence of a recent actual pattern of short-termprofit-taking. Derivatives are also categorised as heldfor trading unless they are designated and effectiveas hedging instruments. Financial assets held fortrading consist of debt instruments, including money-market paper, traded corporate and Group loans, andequity instruments, as well as financial assets withembedded derivatives. They are recognised in theBalance sheet.

Financial instruments included in this category arerecognised initially at fair value; transaction costs aretaken directly to profit or loss. Gains and losses arisingfrom changes in fair value are included directly inprofit or loss and are reported as 'Net gains/(losses)on financial instruments classified as held for trading'.Interest income and expense and dividend income


and expenses on financial assets held for trading areincluded in 'Net interest income' or 'Dividend income',respectively

(b) Loans and receivablesLoans and receivables are non-derivative financialassets with fixed or determinable payments that arenot quoted in an active market, other than:

(a) those that the Group intends to sell immediatelyor in the short term, which are classified as heldfor trading, and those that the Group upon initialrecognition designates as at fair value through

profit or loss;

(b) those that the Group upon initial recognition designates as available for sale; or

(c) those for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration.

Loans and receivables are initially recognised at fairvalue – which is the cash consideration to originateor purchase the loan including any transaction costs– and measured subsequently at amortised cost usingthe effective interest method. Loans and receivablesare reported in the Balance sheet as loans andadvances to Groups or customers or as investmentsecurities. Interest on loans is included in the incomestatement and is reported as 'Interest and similarincome'. In the case of an impairment, the impairmentloss is reported as a deduction from the carryingvalue of the loan and recognised in the incomestatement as ' loan impairment charges'.

(c) Available-for-sale financial assetsAvailable-for-sale financial assets are financial assetsthat are intended to be held for an indefinite periodof time, which may be sold in response to needs forliquidity or changes in interest rates, exchange ratesor equity prices or that are not classified as loans andreceivables, held-to-maturity investments or financialassets at fair value through profit or loss.

Available-for-sale financial assets are initiallyrecognised at fair value, which is the cashconsideration including any transaction costs, andmeasured subsequently at fair value with gains andlosses being recognised in the statement ofcomprehensive income, except for impairment lossesand foreign exchange gains and losses, until thefinancial asset is derecognised. If an available-for-sale financial asset is determined to be impaired, thecumulative gain or loss previously recognised in thestatement of comprehensive income is recognisedin the income statement. However, interest iscalculated using the effective interest method, andforeign currency gains and losses on monetary assetsclassified as available for sale are recognised in theincome statement. Dividends on available-for-saleequity instruments are recognised in the incomestatement in 'Dividend income' when the Group'sright to receive payment is established.

(d) RecognitionThe Group uses trade date accounting for regular waycontracts when recording financial asset transactions.Financial assets that are transferred to a third partybut do not qualify for derecognition are presented inthe statement of financial position as 'Assets pledgedas collateral', if the transferee has the right to sell orrepledge them.

2.4.2 Financial liabilities

The Group’s holding in financial liabilities is in financialliabilities at fair value through profit or loss (includingfinancial liabilities held for trading and those thatdesignated at fair value), financial liabilities atamortised cost and hedging derivatives. Financialliabilities are derecognised when extinguished.

(a) Financial liabilities at fair value through profit orloss

This category comprises two sub-categories: financialliabilities classified as held for trading and financialliabilities designated by the Group as at fair valuethrough profit or loss upon initial recognition.

A financial liability is classified as held for trading ifit is acquired or incurred principally for the purposeof selling or repurchasing it in the near term or if itis part of a portfolio of identified financial instrumentsthat are managed together and for which there isevidence of a recent actual pattern of short-termprofit-taking. Derivatives are also categorised as heldfor trading unless they are designated and effectiveas hedging instruments. Financial liabilities held fortrading also include obligations to deliver financialassets borrowed by a short seller. Those financialinstruments are recognised in the Balance Sheet as'Financial liabilities held for trading'.

Gains and losses arising from changes in fair valueof financial liabilities classified held for trading areincluded in the income statement and are reportedas 'Net gains/(losses) on financial instrumentsclassified as held for trading'. Interest expenses onfinancial liabilities held for trading are included in'Net interest income'.

(b) Other liabilities measured at amortised costFinancial liabilities that are not classified at fair valuethrough profit or loss fall into this category and aremeasured at amortised cost. Financial liabilitiesmeasured at amortised cost are deposits from Groupsor customers, debt securities in issue for which thefair value option is not applied, convertible bondsand subordinated debts.

2.4.3 Determination of fair value

For financial instruments traded in active markets,the determination of fair values of financial assetsand financial liabilities is based on quoted marketprices or dealer price quotations. This includes listedequity securities quoted on the Ghana Stock Exchange.


A financial instrument is regarded as quoted in anactive market if quoted prices are readily and regularlyavailable from an exchange, dealer, broker, industrygroup, pricing service or regulatory agency, and thoseprices represent actual and regularly occurring markettransactions on an arm’s length basis. If the abovecriteria are not met, the market is regarded as beinginactive. Indicators that a market is inactive are whenthere is a wide bid-offer spread or significant increasein the bid-offer spread or there are few recenttransactions.

For all other financial instruments, fair value isdetermined using valuation techniques. In thesetechniques, fair values are estimated from observabledata in respect of similar financial instruments, usingmodels to estimate the present value of expectedfuture cash flows or other valuation techniques, usinginputs (for example, yield curve, FX rates, andcounterparty spreads) existing at the dates of thestatement of financial position.

2.4.4 Derecognition

Financial assets are derecognised when the contractualrights to receive the cash flows from these assetshave ceased to exist or the assets have beentransferred and substantially all the risks and rewardsof ownership of the assets are also transferred (thatis, if substantially all the risks and rewards have notbeen transferred, the Group tests control to ensurethat continuing involvement on the basis of anyretained powers of control does not preventderecognition). Financial liabilities are derecognisedwhen they have been redeemed or otherwiseextinguished.

Collateral (shares and bonds) furnished by the Groupunder standard repurchase agreements and securitieslending and borrowing transactions is notderecognised because the Group retains substantiallyall the risks and rewards on the basis of thepredetermined repurchase price, and the criteria forderecognition are therefore not met. This also appliesto certain securitisation transactions in which theGroup retains a portion of the risks.

2.4.5 Reclassification of financial assets

The Group may choose to reclassify a non-derivativefinancial asset held for trading out of the held-for-trading category if the financial asset is no longerheld for the purpose of selling it in the near-term.Financial assets other than loans and receivables arepermitted to be reclassified out of the held for tradingcategory only in rare circumstances arising from asingle event that is unusual and highly unlikely torecur in the near-term. In addition, the Group maychoose to reclassify financial assets that would meetthe definition of loans and receivables out of theheld-for-trading or available-for-sale categories if theGroup has the intention and ability to hold thesefinancial assets for the foreseeable future or untilmaturity at the date of reclassification. The Groupreclassified asset backed securities from the held fortrading category to loans and receivables (Note 24).

Reclassifications are made at fair value as of thereclassification date. Fair value becomes the newcost or amortised cost as applicable, and no reversalsof fair value gains or losses recorded beforereclassification date are subsequently made. Effectiveinterest rates for financial assets reclassified to loansand receivables and held-to-maturity categories aredetermined at the reclassification date. Furtherincreases in estimates of cash flows adjust effectiveinterest rates prospectively.

2.5 Classes of financial instrument

The Group classifies the financial instruments intoclasses that reflect the nature of information andtake into account the characteristics of those financialinstruments. The classification made can be seen inthe table as follows:


Loans and advancesto customers

Category (as defined by IAS 39) Class (as determined by the Group) Subclasses

Financial assets Financial assets at fair Financial assets held Debt securitiesvalue through profit or loss for trading Equity securities

Derivatives - non-hedgingDebt securities

Designated at fair Loans and advancesvalue through profit to groups

or loss Loans and advancesto customers

Loans and advances to groups

Loans to individuals(retail)

Loans to corporateentities

Loans and receivables

Investment securities -debt instruments

Investment securities -debt securities

Investment securities -debt securities

Investment securities -equity securities

Held-to-maturityInvestments

Available-for-salefinancial assets

Financial liabilities at fairvalue through profit and loss

Financial liabilities held for trading (derivatives - nonhedging only)

Designated at fair value through profit or loss - Debtsecurities in Issue

Deposits from Groups

Deposits fromcustomers

Domestic Group customers

Large corporate customers

Debt securities in issue

Convertible bonds

Subordinated debt

Financial liabilities atarmortised cost

These areadditional classesof financialliabilities atamortised cost

Financialliabilities

Off-balance sheetfinancial Instruments

Loan commitments

Guarantees, acceptances and other financial facilities

OverdraftsCredit cardsTerm loansMortgagesLarge corporatecustomersSME’sOthersListedUnlistedListedUnlistedListedUnlisted

2.6 Offsetting financial Instruments

Financial assets and liabilities are offset and the netamount reported in the Balance sheet when there isa legally enforceable right to offset the recognisedamounts and there is an intention to settle on a netbasis or realise and settle the liability simultaneously.

2.7 Interest income and expense

Interest income and expense for all interest-bearingfinancial instruments are recognised within ‘interestincome’ and ‘interest expense’ in the incomestatement using the effective interest method.

The effective interest method is a method of calculatingthe amortised cost of a financial asset or a financialliability and of allocating the interest income or interestexpense over the relevant period. The effective interestrate is the rate that exactly discounts estimated futurecash payments or receipts through the expected lifeof the financial instrument or, when appropriate, ashorter period to the net carrying amount of thefinancial asset or financial liability. When calculatingthe effective interest rate, the Group estimates cashflows considering all contractual terms of the financialinstrument (for example, prepayment options) butdoes not consider future credit losses. The calculationincludes all fees and points paid or received betweenparties to the contract that are an integral part of theeffective interest rate, transaction costs and all otherpremiums or discounts.

Once a financial asset or a group of similar financialassets has been written down as a result of animpairment loss, interest income is recognised usingthe rate of interest used to discount the future cashflows for the purpose of measuring the impairmentloss.

2.8 Fee and commission income

Fees and commissions are generally recognised onan accrual basis when the service has been provided.Loan commitment fees for loans that are likely to bedrawn down are deferred (together with related directcosts) and recognised as an adjustment to the effectiveinterest rate on the loan. Loan syndication fees arerecognised as revenue when the syndication has beencompleted and the Group has retained no part of theloan package for itself or has retained a part at thesame effective interest rate as the other participants.

2.9 Dividend income

Dividends are recognised in the income statement in'Dividend income' when the entity’s right to receivepayment is established.

2.10 Impairment of financial assets

(a) Assets carried at amortised costThe Group assesses at each reporting date whetherthere is objective evidence that a financial asset orgroup of financial assets is impaired. A financial assetor a group of financial assets is impaired andimpairment losses are incurred only if there is objectiveevidence of impairment as a result of one or moreevents that occurred after the initial recognition ofthe asset (a ‘loss event’) and that loss event (orevents) has an impact on the estimated future cashflows of the financial asset or group of financial assetsthat can be reliably estimated.

The criteria that the Group uses to determine thatthere is objective evidence of an impairment lossinclude:

(a) significant financial difficulty of the issuer or obligor;

(b) a breach of contract, such as a default or delinquency in interest or principal payments;

(c) the lender, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;

(d) it becomes probable that the borrower will enter bankruptcy or other financial reorganisation;

(e) the disappearance of an active market for that financial asset because of financial difficulties; or

(f) observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identifiedwith the individual financial assets in the portfolio, including:

i) adverse changes in the payment status of borrowers in the portfolio; and

ii) national or local economic conditions that correlate with defaults on the assets in the portfolio.

The estimated period between a loss occurring and itsidentification is determined by local management foreach identified portfolio. In general, the periods used varybetween 3 and 12 months; in exceptional cases, longerperiods are warranted.


The estimated period between a loss occurring and itsidentification is determined by local management foreach identified portfolio. In general, the periods used varybetween 3 and 12 months; in exceptional cases, longerperiods are warranted.

The Group first assesses whether objective evidence ofimpairment exists individually for financial assets that areindividually significant, and individually or collectively forfinancial assets that are not individually significant. If theGroup determines that no objective evidence of impairmentexists for an individually assessed financial asset, whethersignificant or not, it includes the asset in a group offinancial assets with similar credit risk characteristics andcollectively assesses them for impairment. Assets thatare individually assessed for impairment and for whichan impairment loss is or continues to be recognised arenot included in a collective assessment of impairment.

The amount of the loss is measured as the differencebetween the asset’s carrying amount and the presentvalue of estimated future cash flows (excluding futurecredit losses that have not been incurred) discounted atthe financial asset’s original effective interest rate. Thecarrying amount of the asset is reduced through the useof an allowance account and the amount of the loss isrecognised in the income statement. If a loan or held-to-maturity investment has a variable interest rate, thediscount rate for measuring any impairment loss is thecurrent effective interest rate determined under thecontract. As a practical expedient, the Group may measureimpairment on the basis of an instrument’s fair valueusing an observable market price.

The calculation of the present value of the estimatedfuture cash flows of a collateralised financial asset reflectsthe cash flows that may result from foreclosure less costsfor obtaining and selling the collateral, whether or notforeclosure is probable. For the purposes of a collectiveevaluation of impairment, financial assets are groupedon the basis of similar credit risk characteristics (that is,on the basis of the Group’s grading process that considersasset type, industry, geographical location, collateral type,past-due status and other relevant factors). Thosecharacteristics are relevant to the estimation of futurecash flows for groups of such assets by being indicativeof the debtors’ ability to pay all amounts due accordingto the contractual terms of the assets being evaluated.

Future cash flows in a group of financial assets that arecollectively evaluated for impairment are estimated onthe basis of the contractual cash flows of the assets inthe group and historical loss experience for assets withcredit risk characteristics similar to those in the group.Historical loss experience is adjusted on the basis ofcurrent observable data to reflect the effects of currentconditions that did not affect the period on which thehistorical loss experience is based and to remove theeffects of conditions in the historical period that do notcurrently exist.

Estimates of changes in future cash flows for groups ofassets should reflect and be directionally consistent withchanges in related observable data from period to period(for example, property prices and payment status, orother factors indicative of changes in the probability oflosses in the Group and their magnitude). The methodologyand assumptions used for estimating future cash flowsare reviewed regularly by the Group to reduce anydifferences between loss estimates and actual lossexperience.

When a loan is uncollectible, it is written off against therelated allowance for loan

impairment. Such loans are written off after all thenecessary procedures have been completed and theamount of the loss has been determined. Impairmentcharges relating to loans and advances to Groups andcustomers are classified in loan impairment charges whilstimpairment charges relating to investment securities (heldto maturity and loans and receivables categories) areclassified in 'Net gains/(losses) on investment securities'.

If, in a subsequent period, the amount of the impairmentloss decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised(such as an improvement in the debtor’s credit rating),the previously recognised impairment loss is reversed byadjusting the allowance account. The amount of thereversal is recognised in the income statement.

(b) Assets classified as available-for-saleThe Group assesses at each reporting date whetherthere is objective evidence that a financial asset ora group of financial assets is impaired. In the case ofequity investments classified as available for sale, asignificant or prolonged decline in the fair value ofthe security below its cost is objective evidence ofimpairment resulting in the recognition of animpairment loss. If any such evidence exists foravailable-for-sale financial assets, the cumulative loss– measured as the difference between the acquisitioncost and the current fair value, less any impairmentloss on that financial asset previously recognised inprofit or loss – is removed from equity and recognisedin the income statement. Impairment losses recognisedin the income statement on equity instruments arenot reversed through the income statement. If, in asubsequent period, the fair value of a debt instrumentclassified as available for sale increases and theincrease can be objectively related to an eventoccurring after the impairment loss was recognisedin profit or loss, the impairment loss is reversedthrough the income statement.


(c) Renegotiated loansLoans that are either subject to collective impairmentassessment or individually significant and whoseterms have been renegotiated are no longerconsidered to be past due but are treated as newloans. In subsequent years, the asset is consideredto be past due and disclosed only if renegotiatedagain.

2.11 Impairment of non-financial assets

Intangible assets that have an indefinite useful lifeare not subject to amortisation and are tested annuallyfor impairment. Assets are reviewed for impairmentwhenever events or changes in circumstances indicatethat the carrying amount may not be recoverable. Animpairment loss is recognised for the amount bywhich the asset’s carrying amount exceeds itsrecoverable amount. The recoverable amount is thehigher of an asset’s fair value less costs to sell andvalue in use. For the purposes of assessing impairment,assets are grouped at the lowest levels for whichthere are separately identifiable cash flows (cash-generating units). The impairment test also can beperformed on a single asset when the fair value lesscost to sell or the value in use can be determinedreliably. Non-financial assets that suffered impairmentare reviewed for possible reversal of the impairmentat each reporting date. No non-financial assets wereimpaired in 2010.

2.12 Cash and cash equivalents

Cash and cash equivalents comprise balances withless than three months’ maturity from the date ofacquisition, including cash in hand, deposits held atcall with Groups and other short-term highly liquidinvestments with original maturities of three monthsor less.

2.13 Repossessed property

In certain circumstances, property is repossessedfollowing the foreclosure on loans that are in default.Repossessed properties are measured at the lowerof carrying amount and fair value less costs to selland reported within ‘Other assets’.

2.14 Leases

When assets are held subject to a finance lease, thepresent value of the lease payments is recognised asa receivable. The difference between the grossreceivable and the present value of the receivable isrecognised as unearned finance income. Lease incomeis recognised over the term of the lease using thenet investment method (before tax), which reflectsa constant periodic rate of return.

2.15 Property, plant and equipment

Land and buildings comprise mainly branches andoffices. All property, plant and equipment used bythe Group is stated at historical cost less depreciation.Historical cost includes expenditure that is directlyattributable to the acquisition of the items. Buildingsare shown at valuation less subsequent depreciationSubsequent expenditures are included in the asset’scarrying amount or are recognised as a separate asset,as appropriate, only when it is probable that futureeconomic benefits associated with the item will flowto the Group and the cost of the item can be measuredreliably. The carrying amount of the replaced part isderecognised. All other repair and maintenance costsare charged to profit or loss during the financial periodin which they are incurred.

Land is not depreciated. Depreciation of other assetsis calculated using the straight-line method to allocatetheir cost to their residual values over their estimateduseful lives, as follows:

Buildings 2.5%Motor vehicles 25%Furniture and equipment 20%Computers 33.33%

The assets’ residual values and useful lives arereviewed, and adjusted if appropriate, at the end ofeach reporting period. Assets are reviewed forimpairment whenever events or changes incircumstances indicate that the carrying amount maynot be recoverable.

An asset’s carrying amount is written downimmediately to its recoverable amount if the asset’scarrying amount is greater than its estimatedrecoverable amount. The recoverable amount is thehigher of the asset’s fair value less costs to sell andvalue in use. No property, plant and equipment wereimpaired as at 31 December 2010 (2009: nil). Gainsand losses on disposal are determined by comparingproceeds with carrying amounts. These are recordedin the income statement.

2.16 Intangible assets

(a) Computer softwareIntangible assets comprise computer software licences.Intangible assets are recognised at cost. Intangibleassets with a definite useful life are amortised usingthe straight-line method over their estimated usefuleconomic life, generally not exceeding 3 years.Intangible assets with an indefinite useful life are notamortised. Generally, the identified intangible assets


of the Group have a definite useful life. At the end ofeach reporting period, intangible assets are reviewedfor indications of impairment or changes in estimatedfuture economic benefits. If such indications exist,the intangible assets are analysed to assess whethertheir carrying amount is fully recoverable. Animpairment loss is recognised if the carrying amountexceeds the recoverable amount.

2.17 Income tax

(a) Current income taxThe tax expense for the period comprises current anddeferred income tax. Tax is recognised in the incomestatement, except to the extent that it relates toitems recognised in other comprehensive income ordirectly in equity. In this case, the tax is also recognisedin other comprehensive income or directly in equityrespectively.

The current income tax charge is calculated on thebasis of tax laws enacted by the Internal RevenueAct 2000(Act 592) at the reporting date. Managementperiodically evaluates positions taken in tax returnswith respect to situations in which applicable taxregulation is subject to interpretation. It establishesprovisions where appropriate on the basis of amountsexpected to be paid to the tax authorities.

(b) Deferred income taxDeferred income tax is recognised, using the liabilitymethod, on temporary differences arising betweenthe tax bases of assets and liabilities and their carryingamounts in the financial statements. However,deferred tax liabilities are not recognised if they arisefrom the initial recognition of goodwill; deferredincome tax is not accounted for if it arises from initialrecognition of an asset or liability in a transactionother than a business combination that at the timeof the transaction affects neither accounting nortaxable profit or loss. Deferred income tax isdetermined using tax rates (and laws) that have beenenacted or substantially enacted by the reportingdate and are expected to apply when the relateddeferred income tax asset is realised or the deferredincome tax liability is realised.

Deferred income tax assets are recognised only tothe extent that it is probable that future taxable profitwill be available against which the temporarydifferences can be utilised.

Deferred income tax is provided on temporarydifferences except for deferred income tax liabilitywhere the timing of the reversal of the temporarydifference is controlled by the Group and it is probablethat the temporary difference will not reverse in theforeseeable future.

Deferred income tax assets and liabilities are offsetwhen there is a legally enforceable right to offsetcurrent tax assets against current tax liabilities andwhen the deferred income taxes assets and liabilitiesrelate to income taxes levied by the same taxationauthority on either the same entity or different taxableentities where there is an intention to settle thebalances on a net basis.

2.18 Provisions

Provisions for restructuring costs and legal claims arerecognised when: the Group has a present legal orconstructive obligation as a result of past events; itis probable that an outflow of resources will berequired to settle the obligation; and the amount hasbeen reliably estimated. Restructuring provisionscomprise lease termination penalties and employeetermination payments. Provisions are not recognisedfor future operating losses.

Where there are a number of similar obligations, thelikelihood that an outflow will be required in settlementis determined by considering the class of obligationsas a whole. A provision is recognised even if thelikelihood of an outflow with respect to any one itemincluded in the same class of obligations may besmall.

Provisions are measured at the present value of theexpenditures expected to be required to settle theobligation using a pre-tax rate that reflects currentmarket assessments of the time value of money andthe risks specific to the obligation. The increase in theprovision due to passage of time is recognised asinterest expense.

2.19 Financial guarantee contracts

Financial guarantee contracts are contracts that requirethe issuer to make specified payments to reimbursethe holder for a loss it incurs because a specifieddebtor fails to make payments when due, inaccordance with the terms of a debt instrument. Suchfinancial guarantees are given to Groups, financialinstitutions and other bodies on behalf of customersto secure loans, overdrafts and other Grouping facilities.

Financial guarantees are initially recognised in thefinancial statements at fair value on the date theguarantee was given. The fair value of a financialguarantee at the time of signature is zero becauseall guarantees are agreed on arm's length terms andthe value of the premium agreed corresponds to thevalue of the guarantee obligation. No receivable forthe future premiums is recognised. Subsequent toinitial recognition, the Group’s liabilities under suchguarantees are measured at the higher of the initial


amount, less amortisation of fees recognised inaccordance with IAS 18, and the best estimate of theamount required to settle the guarantee. Theseestimates are determined based on experience ofsimilar transactions and history of past losses,supplemented by the judgment of management. Thefee income earned is recognised on a straight-linebasis over the life of the guarantee.

2.20 Stated capital

Dividends on ordinary sharesDividends on ordinary shares are recognised in equityin the period in which they are approved by theGroup’s shareholders.

Dividends for the year that are declared after thereporting date are dealt with in the subsequent eventsnote.

2.21 Fiduciary activities

The Group acts as trustees and in other fiduciarycapacities that result in holding or placing of assetson behalf of individuals, trusts, retirement benefitplans and other institutions. These assets and incomearising thereon are excluded from these financialstatements, as they are not assets of the Group.

2.22 Consolidation

The financial statements of the consolidatedsubsidiaries used to prepare the consolidated financialstatements were prepared as of the parent company’sreporting date. The consolidation principles areunchanged as against the previous year.

(a) SubsidiariesSubsidiaries are all the entities over which the Grouphas power to govern the financial and operatingpolicies generally accompanying a shareholding ofmore than one half of the voting rights. The existenceand effect of potential voting rights that are currentlyexcisable or convertible are considered when assessingwhether the Group controls another entity. Subsidiariesare fully consolidated from the date on which controlis transferred to the Group. They are deconsolidatedfrom the date on which control ceases.

Inter-company transactions, balances and unrealisedgains on transactions between group companies areeliminated. Unrealised losses are also eliminatedunless the transaction provides evidence of impairmentof the asset transferred.

(b) AssociatesAssociates are all entities over which the Group hassignificant influence but not control, generallyaccompanying a shareholding of between 20% and50% of the voting rights. Investments in associates

are accounted for by the equity method of accountingand are initially recognised at cost.

2.23 Comparatives

Except when a standard or an interpretation permitsor requires otherwise, all amounts are reported ordisclosed with comparative information. Where IAS8 applies, comparative figures have been adjusted toconform to changes in presentation in the currentyear.

3 Financial risk management

The Group’s business involves taking on risks in atargeted manner and managing them professionally.The core functions of the Group's risk managementare to identify all key risks for the Group, measurethese risks, manage the risk positions and determinecapital allocations. The Group regularly reviews itsrisk management policies and systems to reflectchanges in markets, products and best marketpractice.The Group’s aim is to achieve an appropriatebalance between risk and return and minimisepotential adverse effects on the Group’s financialperformance.

The Group defines risk as the possibility of losses orprofits foregone, which may be caused by internal orexternal factors.

Risk management is carried out by the risk departmentunder policies approved by the Board of Directors.The department identifies, evaluates financial risksin close co-operation with the Group’s operating units.The Board provides written principles for overall riskmanagement, as well as written policies coveringspecific areas, such as foreign exchange risk, interestrate risk, credit risk, use of derivative financialinstruments and non-derivative financial instruments.In addition, internal audit is responsible for theindependent review of risk management and thecontrol environment.

The risks arising from financial instruments to whichthe Group is exposed are financial risks, which includescredit risk, liquidity risk, market risk (which arediscussed below) and operational risk.

3.1 Credit risk

Credit risk is the risk of suffering financial loss, shouldany of the Group’s customers,market counterpartiesfail to fulfil their contractual obligations to the Group.Credit risk arises mainly from commercial andconsumer loans and advances, credit cards, and loancommitments arising from such lending activities, butcan also arise from credit enhancement provided,such as financial guarantees, letters of credit,


endorsements and acceptances.The Group is alsoexposed to other credit risks arising from investmentsin debt securities and other exposures arising fromits trading activities (trading exposures), includingnon-equity trading portfolio assets, derivatives andsettlement balances with market counterparties andreverse repurchase loans. Credit risk is the singlelargest risk for the Groups business; managementtherefore carefully manages its exposure to creditrisk. The credit risk management and control arecentralised in a credit risk management team, whichreports to the Board of Directors and head of eachbusiness unit regularly.

3.1.1 Credit risk measurement

(a) Loans and advances (including loancommitments and guarantees) The estimation of credit exposure is complex andrequires the use of models, as the value of a productvaries with changes in market variables, expectedcash flows and the passage of time. The assessmentof credit risk of a portfolio of assets entails furtherestimations as to the likelihood of defaults occurring,of the associated loss ratios and of default correlationsbetween counterparties.

The Group has developed models to support thequantification of the credit risk. These rating andscoring models are in use for all key credit portfoliosand form the basis for measuring default risks. Inmeasuring credit risk of loan and advances at acounterparty level, the Group considers threecomponents: (i) the probability of default (PD) bythe client or counterparty on its contractual obligations;(ii) current exposures to the counterparty and its likelyfuture development, from which the Group derivethe exposure at default (EAD); and (iii) the likelyrecovery ratio on the defaulted obligations (the lossgiven default ) (LGD). The models are reviewedregularly to monitor their robustness relative to actualperformance and amended as necessary to optimisetheir effectiveness.

(b) Debt securities For debt securities, external rating such as Standard& Poor’s rating or their equivalents are used by GroupTreasury for managing of the credit risk exposures assupplemented by the Group's own assessment throughthe use of internal ratings tools.

3.1.2 Risk measurement Risk limitcontrol and mitigation policies

The Group manages, limits and controls concentrationsof credit risk wherever they are identified " in particular,to individual counterparties and Banks and to industries.

The Group structures the levels of credit risk itundertakes by placing limits on the amount of riskaccepted in relation to one borrower, or Groups ofborrowers, and to and industry segments. Such risks

are monitored on a revolving basis and subject to anannual or more frequent review, when considerednecessary. Limits on the level of credit risk by productand industry sector are approved quarterly by theBoard of Directors.

The exposure to any one borrower including Banks isfurther restricted by sub-limits covering on- and off-balance sheet exposures, and daily delivery risk limitsin relation to trading items such as forward foreignexchange contracts. Actual exposures against limitsare monitored daily. Lending limits are reviewed inthe light of changing market and economic conditionsand periodic credit reviews and assessments ofprobability of default.

Some other specific control and mitigation measuresare outlined below:

(a) CollateralThe Group employs a range of policies and practicesto mitigate credit risk. The most traditional of theseis the taking of security for funds advances, which iscommon practice. The Group implements guidelineson the acceptability of specific classes of collateral orcredit risk mitigation. The principal collateral typesfor loans and advances are:

• Mortgages over residential properties.• Charges over business assets such as premises,

inventory and accounts receivable.• Charges over financial instruments such as debt

securities and equities.

Longer-term finance and lending to corporate entitiesare generally secured. In addition, in order to minimisethe credit loss the Group will seek additional collateralfrom the counterparty as soon as impairment indicatorsare identified for the relevant individual loans andadvances.

Collateral held as security for financial assets otherthan loans and advances depends on the nature ofthe instrument. Debt securities, treasury and othereligible bills are generally unsecured, with theexception of asset-backed securities and similarinstruments, which are secured by portfolios of financialinstruments.

3.1.3 Impairment and provisioning policies

Impairment allowances are recognised for financialreporting purposes only for losses that have beenincurred at the reporting date based on objectiveevidence of impairment. Due to the differentmethodologies applied, the amount of incurred creditlosses provided for in the financial statements isusually lower than the amount determined from theexpected loss model that is used for internaloperational management and Banking regulationpurposes.



3.1.4 Maximum exposure to credit risk before collateral heldCredit risk exposures relating to on-balance sheet assets are as follows:

Maximum exposure2010 2009

Cash and balances with Bank of Ghana 144,237 104,162Government securities 468,974 268,534Loans and advances to Banks 314,235 442,806Loans and advances to customers:

Domestic 288,586 113,789Corporate 207,457 342,370

Trading assets 1,851 2,540Other assets 30,154 40,665Investment securities: available for sale 17,360 24,363

1,472,854 1,339,229Credit risk exposures relating to off-balance sheet items are as follows:Financial guarantees 141,739 223,062Loan commitments and other credit related liabilities 156,010 10,067

297,749 233,129At 31 December 1,770,603 1,572,358

The above table represents a worse-case scenario ofcredit risk exposure to the Group at 31 December 2010and 2009, without taking account of any collateral heldor other credit enhancements attached. For on-balance-sheet assets, the exposures set out above are basedon net carrying amounts as reported in the consolidatedstatement of financial position.

As shown above, 55% of the total maximum exposureis derived from loans and advances to banks and

customers (2009:67%);investment held in governmentsecurities represents 32% (2009:20%).

Management is confident in its ability to continue tocontrol and sustain minimal exposure of credit risk tothe Group resulting from both its loans and advancesportfolio and investment securities.


3.1.5 Loans and advances

(a) Loans and advances are summarised as follows:2010 2009

Loans and Loans and Loans and Loans andadvances to advances to advances to advances to

to bank customers to bank customers

Neither past due nor impaired 314,235 471,651 442,806 458,888Past due but not impaired - 25,773 - 788Individually impaired - 23,333 - 15,435Gross 314,235 520,757 442,806 475,111Less: allowance for impairment - (24,714) - (18,952)Net 314,235 496,043 442,806 456,159

(b) Loans and advances neither past due nor impaired The credit quality of the portfolio of loans and advances to customers that were neither past due nor impairedcan be assessed with reference to the internal rating system adopted by the Group. Gradings of current andOther Loans Especially Mentioned (OLEM) are not considered past due nor impaired.

At 31 December 2010Loans and advances to customers

Domestic CorporateOverdrafts Credit cards Term Loans Mortgages Overdrafts Term loans Total

Grades: Current 22,256 2,769 122,506 8,833 80,030 211,284 447,679OLEM 8,390 - 15,582 - - - 23,972Total 30,646 2,769 138,088 8,833 80,030 211,284 471,651

At 31 December 2009Loans and advances to customers

Domestic CorporateOverdrafts Credit cards Term Loans Mortgages Overdrafts Term loans Total

Grades: Current 32,744 3,033 76,884 6,129 80,030 253,780 451,045OLEM 618 2,861 - 206 2,081 2,077 7,843Total 33,36 5,894 76,884 6,335 80,556 255,857 458,888


3.1.5 Loans and advances (continued)

(c) Loans and advances past due but not impairedLoans and advances less than 90 days past due are not considered impaired, unless other information is availableto indicate the contrary. Gross amount of loans and advances by class to customers that were past due but notimpaired were as follows: At 31 December 2010

Domestic Corporate Overdrafts Term loans Overdrafts Term loans Total

Past due up to 30 days 2,001 576 - - 2,577 Past due 30-60 days 8,967 1,315 - 7,759 18,041 Past due 60-90 days 3,190 1,965 - - 5,155 Total 14,158 3,856 - 7,759 25,773 Fair value of collateral 12,742 10,454 - - 23,19

At 31 December 2009


Past due up to 30 days 188 - 238 - 426Past due 30-60 days 106 - 256 - 362Total 294 - 494 - 788Fair value of collateral 350 - 60 - 410

At 31 December 2010


Individual impaired loans 10,500 12,833 - - 23,333 Impairment allowance 8,658 8,236 - - 16,894 Fair value of collateral 1,967 10,138 - - 12,105

At 31 December 2009 Individual impaired loans 4,467 2,988 2,325 5,655 15,435

Fair value of collateral 5,921 3,098 4,656 14,051 27,726

(d) Loans and advances individually impairedThe breakdown of the gross amount of individually impaired loans and advances by class, along with the fairvalue of related collateral held by the bank as security, are as follows:


3.1.5 Loans and advances (continued)

(e) Loans and advances renegotiatedRestructuring activities include extended payment arrangements, approved external management plans, modificationand deferral of payments. Restructuring policies and practices are based on indicators or criteria which, in thejudgment of management, indicate that payment will most likely continue. These policies are kept under continuousreview. Restructuring is most commonly applied to term loans.

Loans and advances to customers Continuing to be impaired after restructuring (included in non-performing loans) 2010 2009Non–impaired after restructuring - would otherwise have been impaired 16,668 1,645Non–impaired after restructuring - would otherwise not have been impaired - -

3.2 Market risk

Market risk is the risk of loss arising from adversechanges in market conditions (interest rates, exchangerates and equity prices) during the period requiredby the Group to close out its on- and off-balance sheetpositions. Positions that expose the Group to marketrisk can be trading or non-trading related. Tradingrisk comprises positions that the Group holds as partof its trading or market-making activities, whereasnon-trading risk includes discretionary positions thatthe Group undertakes for liquidity.

3.2.1 Risk identification

The Group identifies market risk through dailymonitoring of levels and profit and loss balances oftrading and non trading positions. The Compliancetogether with the Risk Departments monitor dailytrading activities to ensure that risk exposures takenare within the approved price limits and the overallrisk tolerance levels set by the Board. In addition,Assets and Liabilities Committee (ALCO) members,the Treasurer and the Risk Manager monitor marketrisk factors that affect the value of trading and non-trading positions as well as income streams on non-trading portfolios on a daily basis. They also trackliquidity indicators to ensure that Group subsidiariesmeet their financial obligations at all times.

3.2.2 Interest rate risk

Interest rate risk is the exposure of current and futureearnings and capital to adverse changes in the levelof interest rates. Exposure to interest rate risk canresult from a variety of factors, including:• differences between the timing of market interest

rate changes and the timing of cash flows(repricing risk)

• changes in the market interest rates producing different effects on yields on similar instruments with different maturities (yield curve risk); and

• changes in the level of market interest rates producing different effects on rates received or paid on instruments with similar repricingcharacteristics (basis risk).

The Group uses gap analysis to measure its exposureto interest rate risk. Through this analysis, it comparesthe values of interest rate sensitive assets and interestrate sensitive liabilities that mature or reprice atvarious time periods in the future. The Group maymake judgmental assumptions about the behaviourof assets and liabilities which do not have specificcontractual maturity or repricing dates.

(f) Repossessed collateralDuring the year ended 31 December, the Group obtained assets by taking possession of collateral held as security,as follows:

2010 2009Carrying amount Carrying amount

Collateral Related loan Related loan CollateralNature of assetsCommercial property - - 151 311Motor Vehicles 574 508 - -

574 508 151 311

Repossessed properties are sold as soon as practicable with the proceeds used to reduce the outstandingindebtedness.


3.2.2 Interest rate risk (continued)

The table below summarises the repricing profiles of the group’s financial instruments and other assets andliabilities as at 31 December 2010. Items are allocated to time periods with reference to the earlier of the nextcontractual interest rate repricing date and the maturity date.

As at 31 December 2010Up to 1 1-3 3-12 Over 1 Non interest Total

month months months Year Bearing Assets Cash and balances with Bank of Ghana - - - - 144,237 144,237Government securities 115,528 75,218 197,332 138,969 - 527,046Loans and advances to banks 171,802 34,045 - - 108,388 314,235Loans and advances to customers 221,075 215,596 62,555 23,139 - 522,366Trading assets - - - - 1,851 1,851Investment securities: available for sale - - - 17,360 - 17,360Other assets - - - - 30,154 30,154Total financial assets 508,405 324,859 259,887 179,468 284,630 1,557,249

LiabilitiesDeposits from banks 72,019 - - - - 72,019Customer deposits 7,773 151,383 155,043 59,066 743,067 1,116,332Borrowings - - 6,349 72,342 - 78,690Other liabilities - - - - 27,168 27,168Total financial liabilities 79,792 151,383 161,392 131,408 770,236 1,294,210

Total interest repricing gap 428,614 173,476 98,495 48,061 (485,606) 263,039

At 31 December 2009

Total financial assets 374,797 262,648 315,927 73,807 312,050 1,339,229Total financial liabilities 187,362 113,793 139,440 163,446 575,365 1,179,406Total interest repricing gap 187,435 148,855 176,487 (89,639) (263,315) 159,823


3.2.3 Foreign exchange risk

Foreign exchange risk is measured through the income statement. The Group takes on exposure to the effects offluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. The Boardsets limits on the level of exposure by currency and in aggregate for both overnight and intra group.The table below summarizes the Group exposure to foreign currency exchange rate risk at 31 December.

At 31 December 2010EUR USD GBP Cedis Others Total

Assets -Cash and balances with Bank of Ghana 1,476 5,117 432 137,063 149 144,237

Government securities - - - 472,924 - 472,924Loans and advances to banks 18,877 285,237 4,238 - 5,883 314,235Trading assets - - - 1,851 - 1,851Loans and advances to customers 3,889 230,647 12 261,495 - 496,043Investment securities: available for sale - - - 17,360 - 17,360Other assets 12 4,736 13 25,393 - 30,154Total 24,254 525,737 4,695 916,086 6,032 1,476,804

Liabilities Deposits from banks - 24,557 - 45,364 - 69,921Deposits due to customers 19,561 411,938 4,677 672,997 7,159 1,116,332Other liabilities - 4,472 - 27,812 - 32,284Borrowings - 71,044 - 4,985 - 76,029Total 19,561 512,011 4,677 751,158 7,159 1,294,566

Net on balance sheet position 4,693 13,726 18 164,928 (1,127) 182,238

Credit commitments 8,514 176,049 - 97,139 16,046 297,749

At 31 December 2009 Total assets 50,734 564,473 1,695 691,750 30,577 1,339,229Total liabilities 41,749 540,445 - 578,462 18,750 1,179,406Net on balance sheet position 8,985 24,028 1,695 113,288 11,827 159,823

Credit commitments 25,301 165,978 377 39,745 1,728 233,129


3.2.4 Market risk measurement techniques

The Group applies a value at risk methodology (VAR)to its trading and non-trading portfolios, to estimatethe market risk of positions held and the maximumlosses expected, based upon a number of assumptionsfor various changes in market conditions. The Boardsets limits on the value of risk that may be acceptedfor the Group, trading and non-trading separately,which are monitored on a daily basis by Group Treasury.

VAR is a statistically based estimate of the potentialloss on the current portfolio from adverse marketmovements. It expresses the maximum amount theGroup might lose, but only to a certain level ofconfidence (98%).

There is therefore a specified statistical probability(2%) that actual loss could be greater than the VARestimate. The VAR model assumes a certain holdingperiod until positions can be closed (10 days). It alsoassumes that market moves occurring over this holdingperiod will follow a similar pattern to those that haveoccurred over the preceeding10-day period in thepast. The Group’s assessment of past movements isbased on data for the past five years. The Groupapplies these historical changes in rates, prices, indices,etc. directly to its current positions " a method knownas historical simulation. Actual outcomes are monitoredregularly to test the validity of the assumptions andparameters/factors used in the VAR calculation.

The use of this approach does not prevent lossesoutside of these limits in the event of more significantmarket movements.

2010 2009 Low Average High Low Average High

Foreign exchange risk 23 93 211 90 115 163Equity risk 43 48 55 236 303 428Equity risk 236 303 428Interest rate risk 31 41 59 20 240 1,21

3.2.5 Risk monitoring and control

The Risk Management department is responsible forreviewing market risk in the bank. The Treasurydepartment monitors interest rate and liquidity risksrisk through daily, weekly, and monthly reviews ofthe structure and pricing of assets and liabilities.Monthly Assets and Liability Committee (ALCO)meetings are also held.

The Bank analyses the impact of unlikely, but notimpossible events by means of scenario analysis,which enable management to gain a betterunderstanding of the risks that it faces under extremeconditions. Both historical and hypothetical eventsare tested.

3.2.6 Risk reporting

Reports on the bank’s positions are reviewed dailyby the Internal Audit and Compliance Unit. Reportsinclude foreign currency positions and liquidity positionsin all currencies. Variations to expectations arereviewed and corrected if need be.

3.3 Liquidity risk

Liquidity risk is the risk that the Group is unable tomeet its payment obligations associated with itsfinancial liabilities when they fall due and to replacefunds when they are withdrawn. The consequencemay be the failure to meet obligations to repaydepositors and fulfil commitments to lend.


3.3 Liquidity risk (continued)

The table below presents the cash flows payable by the Group under non-derivative financial liabilities and assetsheld for managing liquidity risk by remaining contractual maturities at the date of the consolidated statement offinancial position. The amounts disclosed in the table are the contractual undiscounted cash flow, whereas theGroup manages the liquidity risk based on a different basis not resulting in a significantly different analysis.

At 31 December 2010

Up to 1 month 1-3 months 3-12 months Over 1 year Total

Liabilities Deposits from banks 72,019 - - - 72,019Deposits due to customers 747,997 155,924 159,695 85,920 1,149,537Other liabilities 21,672 8,080 3,232 - 32,985Current tax liabilities - - Borrowings - - 6,349 72,342 78,690

Total liabilities(contractual maturity dates) 841,688 164,005 169,276 158,262 1,333,230

Assets Cash and balances withBank of Ghana 144,237 - - - 144,237Government securities 115,528 75,218 197,332 138,969 527,046Loans and advances to banks 259,017 34,045 - 38,993 332,055Trading assets 1,962 - - - 1,962Loans and advances to customers 221,075 215,596 62,555 23,139 522,366Investment securities - - - 17,360 17,360Current income tax - 1,281 - - 1,281Other assets 18,884 9,442 1,827 - 30,154Assets held for managingliquidity risk(contractual maturity dates) 760,703 335,582 261,714 218,461 1,576,461Liquidity gap 80,984 (171,577) (92,439) (60,199) (243,230)

At 31 December 2009

Total liabilities (Contractualmaturity dates) 717,037 149,007 167,686 164,932 1,198,662Total assets (Contractualmaturity dates) 491,055 276,665 335,501 236,008 1,339,229 Liquidity gap 225,982 (127,658) (167,815) (71,076) (140,567)


3.4 Country analysis

The amount of total assets and total liabilities held by the Group in and outside of Ghana is analysed below.

In Ghana Outside Ghana In Ghana Outside GhanaAssets 2010 2010 2009 2009

Cash and balances with Bank of Ghana 144,237 - 104,162 - Government securities 468,974 - 268,534 - Loans and advances to banks 15,803 298,432 930 441,876 Trading assets 1,851 - 2,540 - Loans and advances to customers 496,043 - 456,159 - Investment securities 17,360 - 24,363 - Investment in Associates 3,959 - - - Intangible asset 2,685 - 3,630 - Property and equipment 40,450 - 44,015 - Current income tax assets 1,281 - - - Other assets 30,154 - 34,710 5,955 Total assets 1,222,797 298,432 939,043 447,831

Liabilities Deposits from banks 32,615 37,306 84,093 6,035 Deposits due to customers 1,116,332 - 922,077 - Other liabilities 27,168 - 68,112 16,591 Current income tax - - 1,147 - Deferred income tax liabilities 4,133 - 2,227 - Borrowings 4,359 71,670 4,359 78,140 Total liabilities 1,184,607 108,976 1,082,015 100,766

3.5 Fair value of financial assets and liabilities

(a) Financial instruments not measured at fair valueThe table below summarises the carrying amounts and fair values of those financial assets and liabilities notpresented on the Group’s balance sheet at their fair values.

Carrying value Fair value 2010 2009 2010 2009Financial assets Loans and advances to customers 496,043 455,762 477,712 451,893Loans and advances to banks 314,235 442,806 312,206 432,467Financial liabilities Deposits from banks 66,649 90,127 66,210 88,970Deposits from customers 1,116,376 922,077 1,094,631 910,619Borrowings 76,029 82,499 73,833 76,481


(i) Loans and advances to banksLoans and advances to banks include inter-bankplacements and items in the course of collection. Thecarrying amount of floating rate placements andovernight deposits is a reasonable approximation offair value. The estimated fair value of fixed interestbearing deposits is based on discounted cash flowsusing prevailing money-market interest rates for debtswith similar credit risk and remaining maturity.

(ii) Loans and advances to customersLoans and advances are net of charges for impairment.The estimated fair value of loans and advancesrepresents the discounted amount of estimated futurecash flows expected to be received. Expected cashflows are discounted at current market rates todetermine fair value.

(iii) Investment securitiesThe fair value for loans and receivables and held-to-maturity assets is based on market prices orbroker/dealer price quotations. Where this informationis not available, fair value is rated using quoted marketprices for securities with similar credit, maturity andyield characteristics. All available for sale assets arealready measured and carried at fair value.

(iv) Deposits from banks and customer depositsThe estimated fair value of deposits with no statedmaturity, which includes non-interest bearing deposits,is the amount repayable on demand. The estimatedfair value of fixed interest-bearing is based ondiscounted cash flows using interest rates for newdebts with similar remaining maturity.

(v) Off-balance sheet financial instrumentsThe estimated fair values of the off-balance sheetfinancial instruments are based on marketsprices for similar facilities. When this information isnot available, fair value is estimated usingdiscounted cash flow analysis.

(b ) Fair value hierarchyIFRS 7 specifies a hierarchy of valuation techniquesbased on whether the inputs to those valuationtechniques are observable or unobservable. Observableinputs reflect market data obtained from independentsources; unobservable inputs reflect the group's marketassumptions. These two types of inputs have createdthe following fair value hierarchy:

Level 1 - Quoted prices (adjusted) in active markets foridentical assets or liabilities. This level includes listedequity securities and debt instruments on exchanges

Level 2 - Inputs other than quoted prices included withinlevel 1 that are observable for the asset or liability, eitherdirectly (as prices) or indirectly (derived from prices).

Level 3 - inputs for the asset or liability that are not basedon observable market data (unobservable inputs). Thislevel includes equity investments and dept instrumentswith significant unobservable components. This hierarchyrequires the use of observable market data when available.The group considers relevant and observable market pricesin its valuations where possible.

4 Capital management

The Group’s objectives when managing capital, whichis a broader concept than the ‘equity’ on the face ofbalance sheets, are:

• To comply with the Bank's capital requirements set by the Bank of Ghana.

• To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and

• To maintain a strong capital base to support the development of its business.

Capital adequacy and the use of regulatory capitalare monitored daily by management, employingtechniques based on the guidelines developed byBasel Committee as implemented by the Bank ofGhana for supervisory purposes. The requiredinformation is filed with the Bank of Ghana on amonthly basis. The Bank of Ghana requires each bankto:

(a) hold the minimum level of the regulatory capitalof GH¢ 60 million; and

(b) maintain a ratio of total regulatory capital to therisk-weighted asset plus risk weighted off balancesheet at or above the required minimum of 10%.

The Bank’s regulatory capital is divided into two tiers:

• Tier 1 capital: share capital arising on permanentshareholders’ equity and income surplus and statutory reserves created; and

• Tier 2 capital: qualifying subordinated loan capital,collective impairment allowances and unrealisedgains arising on the fair valuation of equity instruments held as available for sale.

The risk-weighted assets are measured by means ofa hierarchy of five risk weights classified accordingto the nature of – and reflecting an estimate of credit,market and other risks associated with each assetand counterparty. A similar treatment is adopted foroff-balance sheet exposure, with some adjustmentsto reflect the more contingent nature of the potentiallosses.

Level 1 Level 2 Level 3

Trading assets 1,851 - -

Government securities - 468,974 -

Investment securities- available-for-sale - 17,360 -

Total financial assets 1,851 486,334 -

5 Critical accounting estimates and judgments

The Group's financial statements and its financialresults are influenced by accounting policies,assumptions, estimates and management judgement,which necessarily have to be made in the course ofpreparation of the consolidated financial statements.

The Group makes estimates and assumptions thataffect the reported amounts of assets and liabilitieswithin the next financial year. All estimates andassumptions required in conformity with IFRS are bestestimates undertaken in accordance with the applicablestandard. Estimates and judgements are evaluatedon a continuous basis, and are based on pastexperience and other factors, including expectationswith regard to future events.

(a) Impairment losses on loans and advances The Group reviews its loan portfolios to assessimpairment at least on a quarterly basis. In determiningwhether an impairment loss should be recorded inthe income statement, the Group makes judgmentsas to whether there is any observable data indicatingthat there is a measurable decrease in the estimatedfuture cash flows from a portfolio of loans before the

decrease can be identified with an individual loan inthat portfolio. This evidence may include observabledata indicating that there has been an adverse changein the payment status of borrowers in a group, oreconomic conditions that correlate with defaults onassets in the group. Management uses estimatesbased on historical loss experience for assets withcredit risk characteristics and objective evidence ofimpairment similar to those in the portfolio whenscheduling its future cash flows. The methodologyand assumptions used for estimating both the amountand timing of future cash flows are reviewedregularly to reduce any differences between lossestimates and actual loss experience.

(b) Impairment of available for-sale equity investmentsThe Group determines that available-for-sale equityinvestments are impaired when there has been asignificant or prolonged decline in the fair value belowits cost. This determination of what is significant orprolonged requires judgment. In making this judgment,the Group evaluates among other factors, the normalvolatility in share price.


4 Capital management (continued)

The table below summarises the composition of regulatory capital and the ratios of the Group for the years ended31 December. During those two years, the individual entities within the Group and the Group complied with allof the externally imposed capital requirements to which they are subject.

2010100,000

2,111 36,980 72,566

- (2,685)208,972

50,70015,98966,689

275,661

917,640297,749

1,215,389

22.68

2009100,000

2,71629,65459,041

(1,489) (3,630)186,292

50,03015,49165,521

251,813

906,081223,062

1,129,143

22.30

Tier 1 CapitalShare capitalRegulatory risk reservesStatutory reservesIncome surplusNon controlling interestIntangiblesTotal qualifying tier 1 capital

Tier 2 capitalSubordinated debtOther reservesTotal qualifying tier 2 capitalTotal regulatory capital

Risk weighted assets:On balance sheetOff balance sheetTotal risk weighted assets

Capital adequacy ratio (%)

(c) Fair value of financial instruments The fair value of financial instruments where no activemarket exists or where quoted prices are not otherwiseavailable are determined by using valuationtechniques. In these cases, the fair values are estimatedfrom observable data in respect of similar financialinstruments or using models. Models are calibratedto ensure that outputs reflect actual data andcomparative market prices.

(d) Income taxes Significant estimates are required in determining theprovision for income taxes. There are many transactionsand calculations for which the ultimate taxdetermination is uncertain during the ordinary courseof business. The Group recognises liabilities foranticipated tax audit issues based on estimates ofwhether additional taxes will be due. Where the finaltax outcome of these matters is different from theamounts that were initially recorded, such differenceswill impact the income tax and deferred tax provisionsin the period in which such determination is made.


6 Interest income2010 20095,661 12,382

Placements and short-term funds 63,404 42,452Treasury bills and Governments securities 72,461 76,545Loans and advances 141,526 131,379

7 Interest expenseDemand deposits 8,233 8,667Time deposits 13,260 11,808Borrowed funds 3,893 19,313Savings 7,077 9,134

32,463 48,922

8. Fees and commission incomeTrade finance fees 9,407 17,626Credit related fees and commission 6,502 6,231Cash management 19,594 16,419Other fees and commissions 8,230 3,928

43,733 44,204

9. Fee and commission expenseDirect charges for services 944 2,052

10. Lease incomeFinance lease 3,381 5,066


11. Net trading income2010 2009

Foreign exchange: 2,977 7,079- translation gains less losses 14,784 23,284- transaction gains less losses 1,753 70Interest rate instruments 695 (2,285)Equities 20,209 28,148

12. Dividend incomeListed equities (available for sale) 453 448

13. Other operating incomeProfit on sale of equipment - 148Other income 4,267 1,469

4,267 1,617

14. Impairment charge on loans and advancesLoan impairment 16,443 13,549 Recoveries (10,681) (4,031)

5,762 9,518At 1 January 18,952 9,461Increase in impairment 5,762 9,518Amounts written off during the year as uncollectible - (27)

24,714 18,952

15 Operating expenses

Staff expenses 41,834 33,150Rent 2,369 2,016Travel 1,092 1,264Technology and communications 6,421 7,010Donation and business promotion 2,243 2,060Advertising 1,308 1,641Training 460 1,017Audit fees 217 246Directors fees 396 268Repairs and maintenance 3,930 4,156Depreciation of plant, property and equipment 7,128 6,086Amortisation of software 1,505 1,430Utilities 1,886 2,581Rights issue transaction costs - 902Other administrative expenses 12,953 13,855

83,742 77,681Staff expenses - Staff expenses comprise:Wages and salaries 25,062 19,725Social security fund contribution 2,517 2,466Other allowances 14,255 10,959

41,834 33,150The number of persons employed by the Group at the year end was 890 (2009: 841)


16 Income tax expenses2010 2009

Current income tax 22,902 19,950Deferred income tax (Note 17) 3,154 (2,755)

26,056 17,195

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the basic taxrate as follows:

Profit before tax 90,709 72,689Corporate tax rate at 25% (2009: 25%)Tax calculated at corporate tax rate 22,677 18,172Income subject to tax at different rates (215) (324)Tax impact on expenses not deductible for tax purposes: 3,594 (653)Income tax expense 26,056 17,195

The movement on current income tax is as follows:

Current income taxBalance Charge for Balance at

at 1 January the year Adjustment Payment 31 December

Year of assessmentUp to 2009 1,147 - - - 1,1472010 - 22,902 2,610 22,720 (2,428)

1,147 22,902 2,610 22,720 (1,281)


17 Deferred income tax

Deferred income tax liability is attributable to;2010 2009

Deferred income tax liabilitiesAccelerated tax depreciation 4,306 1,297Available-for-sale securities 166 96Revaluation of land and building 716 716Other temporary differences - 118 5,188 2,227

Deferred income tax assetsProvisions for loan impairment 646 1,083Other provisions 409 236 1,055 1,319Net deferred income tax 4,133 908

The movement on the deferred income tax account is as follows:

Income statement credit 3,154 (2,755)Available-for-sale securities - fair value remeasurement 70 85Revaluation of land and building - 716At 31 December 3,224 908

The deferred income tax credit in the income statement comprises the following temporary differences:

Accelerated tax depreciation 3,009 (579)Provision for loan impairment 437 (472)Other provisions (173) 71Other temporary differences (118) (1,775)

3,154 (2,755)

18. Income tax effects relating to components of other comprehensive income2010 2009

Fair value gain on available for sale securities 70 185Revaluation of land and buildings - 716

70 801

19. National Stabilisation LevyThe National Stabilisation Levy Act, 2009, became effective from 1 July 2009. Under the Act, an additional 5% levy will be charged on profit before tax and is payable quarterly.


Mandatory reserve deposits are not available for use in the bank's day to day operations.Cash in hand and balances with Bank of Ghana are non-interest-bearing.

20. Earnings per share2010 2009

Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the company bythe weighted average number of ordinary shares in issue during the year.

Profit attributable to equity holders of the Bank 60,117 53,853Weighted average number of ordinary shares in issue (millions) 230 208Basic earnings per share (expressed in Ghana pesewas per share) 26 26Diluted earnings per share (expressed in Ghana pesewas per share) 26 26There is no potential dilution on basic earnings per share.

21. Cash and balances with Bank of Ghana

Cash in hand 58,798 48,014Mandatory reserve deposits with Bank of Ghana 85,439 56,148

144,237 104,162

22. Government securities

At 1 January 268,534 89,679Additions 543,715 267,826Redeemed on maturity (343,516) (88,906)Gains/(losses) from changes in fair value (Note 37) 241 (65)At 31 December 468,974 268,534

Maturing within 90 days of acquisition 115,528 119,675Maturing after 90 days but within 182 days 75,218 37,312Maturing after 182 days of acquisition 197,332 111,547Maturing after 1 year of acquisition 80,897 -

468,974 268,534Government securities are treasury bills and bonds issued by the Government of Ghana.These are classified as available-for-sale and carried at their fair value.

23 Loans and advances to banks2010 2009

Operating accounts with other banks 82,972 122,859 Items in course of collection from other banks 25,416 34,513 Placements with banks 205,847 285,434

314,235 442,806

Current 314,235 442,806

24 Trading assets

Listed equity securities 1,851 2,540


25 Loans and advances to customers2010 2009

Overdrafts 159,272 111,923Staff loans 14,992 13,823Finance leases 11,857 17,465Mortgage loans 10,032 6,335Term loans 324,604 325,565Gross loans and advances to customers 520,757 475,111Allowances for impairment (Note 14) (24,714) (18,952)Net loans and advances to customers 496,043 456,159

Analysis by industryConstruction 45,049 43,239Agriculture, forestry and fishing 13,554 12,905Mining and quarrying 11,900 17,601Manufacturing 91,677 89,867Electricity, gas and water 48,527 38,766Commerce and finance 55,796 73,447Transport, storage and communication 160,180 33,152Services 94,074 166,134

520,757 475,111

Current 497,618 382,352Non current 23,139 92,759

The total impairment charge to the income statement during the year represent 1.1%of the gross loans at the year end. (2009: 2%)

The fifty largest exposure by customers constitutes 62% of the gross loans at the year end (2009: 55%).

The total amount of allowance for impairment represent 4.7% of the gross loans at the year end (2009: 3.2%).


25 Loans and Advances to customers (continued)The investment in finance lease may be analysed as follows: 2010 2009

Less than 1 year 3,658 2,530Between 1 year and 5 years 8,127 18,615More than 5 years - 2,090Gross investment in finance leases 11,785 23,235Unearned finance income on finance leases (1,945) (5,770)Net investment in finance leases 9,840 17,465

The net investment in finance lease may be analysed as follows:

Less than 1 year 2,906 1,961Between 1 year and 5 years 6,934 13,944More than 5 years - 1,560 9,840 17,465

25 Loans and Advances to customers (continued)The investment in finance lease may be analysed as follows: 2010 2009

Less than 1 year 3,658 2,530Between 1 year and 5 years 8,127 18,615More than 5 years - 2,090Gross investment in finance leases 11,785 23,235Unearned finance income on finance leases (1,945) (5,770)Net investment in finance leases 9,840 17,465

The net investment in finance lease may be analysed as follows:

Less than 1 year 2,906 1,961Between 1 year and 5 years 6,934 13,944More than 5 years - 1,560 9,840 17,465


26 Investment securities

At 1 January 24,363 35,182Redeemed on maturity (7,426) (11,266)Gains from changes in fair value (Note 37) 423 447At 31 December 17,360 24,363

Current 7,266 24,363Non current 10,094 -

27 Investment in subsidiaries2010 2009

Name of subsidiary Ordinary shares Bank BankEcobank Investment Managers Limited 100% - -Ecobank Leasing Company Limited 100% 1,000 1,000Ecobank Venture Capital Company Limited 100% 1,400 1,400EB Accion Savings and Loans Company Limited - - 3,920

2,400 6,320Ecobank Ghana's investment in EB Accion Savings and Loans Company Limited has been diluted from 58% in 2009 to 49% in 2010.

28 Intangible assets

CostAt 1 January 5,221 2,351Additions 560 2,870

At 31 December 5,781 5,221

Accumulated amortisationAt 1 January 1,591 161Charge for the year 1,505 1,430At 31 December 3,096 1,591Net book value 2,685 3,630Intangible assets represents license for computer software.

29 Property and equipment Furniture Capital

Leasehold and Motor Work in buildings equipment Computers vehicles progress Total

Cost -At 1 January 2010 21,805 19,199 17,140 3,919 - 62,063Additions - 1,892 2,518 1,364 800 6,574Disposals - (13) (9) (24) - (46)Elimination of previouslyconsolidated subsidiary (485) (589) (777) (219) (2,070)At 31 December 2010 21,320 20,489 18,872 5,039 800 66,520

Depreciation At 1 January 2010 132 8,176 7,880 1,860 - 18,048Charge for the year 344 3,212 3,851 620 - 8,027Disposals - (13) (9) (13) - (35)Elimination of previouslyconsolidated subsidiary - 24 6 - - 30At 31 December 2010 476 11,400 11,727 2,467 - 26,070

Net book value at31 December 2010 20,844 9,089 7,145 2,572 800 40,450

At 1 January 2009 4,840 13,381 8,866 2,791 7,643 37,521Revaluation surplus 13,389 - - - - 13,389Additions 329 2,578 5,390 987 2,134 11,418Disposals - (17) (2) (246) - (265)Transfers 3,247 3,257 2,886 387 (9,777) -At 31 December 2009 21,805 19,199 17,140 3,919 - 62,063DepreciationAt 1 January 2009 730 5,850 5,198 1,362 - 13,140Charge for the year 328 2,330 2,684 744 - 6,086Released on revaluationand disposal (926) (4) (2) (246) - (1,178)At 31 December 2009 132 8,176 7,880 1,860 - 18,048

Net book value at31 December 2009 21,673 11,023 9,260 2,059 - 44,015


30 Other assets

2010 2009Fees receivable 6,191 3,816Prepayments 7,378 16,718Due from Affiliates 4,359 5,955Sundry receivables 12,226 14,176

30,154 40,665

Current 21,068 28,411Non-current 9,086 12,254

31 Deposits from banks

Other deposits from banks 69,921 90,127

Current 69,921 90,127

32 Customer deposits

Current accounts 777,612 600,292Cash collateral 41,111 146,718Savings account 129,209 48,238Time deposit 168,400 126,829

1,116,332 922,077

Current 1,030,412 839,517Non-current 85,920 82,560

The twenty largest depositors constitute 25.2% of the total deposits at the year end (2009: 20%).

33 Other liabilities2010 2009

Collections on behalf of customers 9,007 11,577Bankers drafts and managers cheques 4,095 7,562Point of sale terminals 797 761Accruals 7,593 29,737Other liabilities 5,676 35,066

27,168 84,703

Current 27,168 84,703


34 Borrowings

At 1 January Exchange At 31 December 2010 Repayment Differences 2010

Oikocredit Ecumenical Development 1,613 (1,613) - -Social Security and National Insurance Trust (SSNIT) 4,359 - 4,359International Finance Corporation 28,680 - 384 29,064Export Development Investment Fund 685 (59) 626European Investment Bank 25,812 (5,701) 233 20,344Ecobank Transnational Bank 21,350 - 286 21,636

82,499 (7,373) 903 76,029

2010 2009Current 3,236 1,100Non-current 72,793 81,399

Oikocredit Ecumenical Development Co-operative Society made available to the bank, a loan of US$3 million foron-lending to Small-Medium Enterprises, over a period of 5 years, including a moratorium of 1 year from the dateof disbursement of Principal. Interest on the loan is 3.71% plus a margin of 2.5%.

The Social Security and National Insurance Trust made available to the bank a loan of US$4.15 million for on-lending to a customer of the bank, over a 10 years period from 9 June 2008 to 9 June 2015. Interest on the loanis based on the Bank of Ghana prime rate applicable on the date of the drawdown, provided that the rate willbe adjusted from time to time in accordance with any changes in the Bank of Ghana prime rate. Interest on theloan may be capitalised semi-annually counting from date of the drawdown in the event that the Bank fails tohonour interest repayments.

A loan of US$20 million from the International Finance Corporation (IFC) was granted to the Bank by an agreementdated on the 20 July 2007. The purpose of this loan is to be used as a tier II capital, with an interest rate of LIBORplus a margin of 3.01% per annum, for a period of 8 years ending on the 15 June 2015.

The facility from European Investment Bank is repayable in 2014. The purpose of these funds is to provide financialresources for the development and promotion of export trade and small and medium enterprises. Interest onthis facility is LIBOR plus a margin of 3.3% and paid semi-annually.

The borrowing from Export Development Fund (EDIF) is for purposes of on-lending to small scale enterprises,export insurance re-financing and credit guarantee. It is a revolving fund with an interest rate of 2.5% per annum.

The borrowing from Ecobank Transnational Incorporated amounting to USD loan 14.8 million attracts interest atthe rate of LIBOR plus 3.6%. This facility is scheduled to be repaid on 15 June 2015.

The borrowings from International Finance Corporation and Ecobank Transnational Incorporated amounting to GHS50.0 million (2009: GHS50.0 million) are unsecured subordinated debt repayable only on maturity.


35 Stated capital

Authorised 2010 2009Ordinary shares of no par value 500,000,000 500,000,000Issued and fully paidOrdinary shares of no par value 230,128,372 230,128,372Issued ordinary shares comprise:Issued for cash 88,692 88,692Issues for consideration other than cash: - Capitalisation issue in accordance with Section 74 (i) Act 179 (GHS'000) 11,308 11,308At 31 December 100,000 100,000

The movement in stated capital is as follows: Number of Shares Consideration Consideration

2010 2009 2010 2009At 1 January 230,128,372 161,225,000 100,000 16,400Capitalisation issue - 40,306,250 - 4,100Rights issue - 28,597,122 - 79,500At 31 December 230,128,372 230,128,372 100,000 100,000There is no unpaid liability on any shares and there are no call or installments unpaid. There are no treasury shares.

36 Income surplus2010 2009

At 1 January 59,041 41,619Profit for the year 60,117 54,720Dividend paid relating to prior year (41,423) (26,574)Transfer to statutory banking reserves (Note 38) (7,326) (6,689)Transfer to stated capital (Note 35) - (4,100)Release of subsidiary regulatory credit reserve 42 Transfer from regulatory credit risk reserve (Note 39) 563 65Reserves of previously consolidated subsidiary with minority interest 1,552 -At 31 December 72,566 59,041

37 Revaluation reserves

(a) Capital surplus - Land and building revaluation At 1 January 14,953 1,354Revaluation gain (Note 29) - 14,315Deferred tax (Note 17) - (716)At 31 December 14,953 14,953

(b)Available for sale instrumentsAt 1 January 538 241Net gain/(losses) from changes in fair value - government securities (Note 22) 241 (65)Net gains from changes in fair value - investment securities (Note 26) 423 447Deferred income taxes (Note 17) (166) (85)At 31 December 1,036 538Total other reserves 15,989 15,491


38 Statutory Reserve Fund

Statutory reserve represents the cumulative amount set aside from annual net profit after tax as required bySection 29 (1) of the Banking Act, 2004 (Act 673) as amended by the Banking (Amendment) Act of 2007, Act(738) for the bank and Non-Bank Financial Institutions Business Rule 5, for Ecobank Leasing Company Limited.

The proportion of net profits transferred to reserves ranges from 12.5% to 50% of net profit after tax, dependingon the ratio of existing statutory reserve fund to paid up capital. The Bank of Ghana granted a waiver to all banksallowing the rate of provision out of income surplus to stated capital to be maintained at their December 2008levels of paid-up capital until 2010.

2010 2009At 1 January 29,654 22,965Transfer from income surplus 7,326 6,689At 31 December 36,980 29,654

39 Regulatory credit risk reserve

Regulatory credit risk reserve represents the amount required to meet the Bank of Ghana guidelines for allowanceson impairment.

2010 2009At 1 January 2,716 2,781Transfer to Income surplus (563) (65)Release of subsidiary regulatory credit reserve (42) -At 31 December 2,111 2,716

40 Cash and cash equivalents2010 2009

Cash balances (Note 21) 58,798 48,014Government securities 81,329 119,675Due from other banks 290,160 442,806Due to banks (69,921) (90,127)

360,366 520,368

Cash and cash equivalents comprise balances with less than three months’ maturity from the date of acquisition,including cash in hand, deposits held at call with banks and other short term highly liquid investments with originalmaturities of three months or less.

41 Investment in associate

Assets Liabilities Revenues Profit/(loss) interest heldEB Accion Company Limited 14,435 10,107 4,706 74 49%

Cost of Investment 3,920Share of results 51Share of tax (12)At year end 3,959


42 Contingent liabilities and commitments

Off balance sheet itemsIn common with other banks, the bank conducts business involving acceptances, performance bonds and indemnities.The majority of these facilities are offset by corresponding obligations of third parties. In addition, there are otherderivative instruments, including forwards and option contracts or combinations thereof (all commonly knownas derivatives), the nominal amounts of which are not reflected in the consolidated balance sheet.

Nature of instrumentsAn acceptance is an undertaking by a bank to pay a bill of exchange drawn on a customer. The Bank expects mostacceptances to be presented, but reimbursement by the customer is normally immediate.

Other contingent liabilities include transaction related customs and performance bonds and are generally, short-term commitments to third parties which are not directly dependent on the customer's creditworthiness.

Commitments to lend are agreements to lend to a customer in the future, subject to certain conditions. Suchcommitments are either made for a fixed period, or have a specific maturity but are cancellable by the lendersubject to notice requirements. Documentary credits commit the Bank to make payments to third parties, onproduction of documents, which are usually reimbursed immediately by customers.

The following tables summarise the nominal principal amount of contingent liabilities and commitments with off-balance sheet risk.

2010 2009Contingent liabilitiesGuarantees and indemnities 12,475 53,230Documentary and commercial letters of credit 129,265 169,832

141,739 223,062

CommitmentsLoan commitments 156,010 10,067

297,749 233,129

Legal proceedings

There were a number of legal proceedings outstanding against the Group at 31 December 2010. No provision hasbeen made as professional advice indicates that it is unlikely that any significant loss will arise.

43 Transactions with executive directors and key management personnel

Key management personnel are defined as those persons having authority and responsibility for planning, directingand controlling the activities of Ecobank Ghana Limited (directly or indirectly) and comprise the Executive Directorsand Senior Management of Ecobank Ghana Limited.

There were no material related party transactions with companies where a Director or other member of key management personnel (or any connected person) is also a Director or other member key management personnel(or any connected person) of Ecobank Ghana Limited.

No provisions have been recognised in respect of loans to Directors or other members of Key Management Personnel (or any connected person).


Remuneration of executive directors and other key management personnel2010 2009

Salaries and other short-term benefits 882 704Social security contribution 87 88

968 792

Details of transactions between Directors and other key management personnel (and their connected persons) and the Group are as follows:

2010 2009LoansLoans outstanding at 1 January 152 172Net movement 362 (20)Loans outstanding at 31 December 513 152Interest income 20 11There were no loans given to non executive directors.

Deposits 2010 2009Deposits at 1 January 119 290Net movement during the year 264 (171)Deposits at 31 December 383 119Interest expense 24 11

44 Business segments

The Group has three main business segments:a) Domestic banking - This incorporates Consumer, Small and medium enterprises, Local Corporates and Public

sectors of the market.

b) Corporate banking - Specialises in serving the public sector, multinational institutions, financial institutions/international organisation and Regional Corporate segment of the market.

c) Capital - Capital engages in Foreign exchange trading and manages the bank’s balance sheet, ensuring that all interest rate and exchange rate risks are adequately monitored. The unit is also in charge of liquidity management; ensuring that the bank is able to honour its commitments as and when they fall due.

Transactions between the business segments are on normal commercial terms and conditions. Funds are ordinarily allocated between segments, resulting in funding cost transfers disclosed in operating income. Interest charged for these funds is based on the Group’s cost of capital.

The Group's operations are based in Ghana. There are no separately distinguishable geographical segments.

The segmental information provided to the board for reportable segments for the year ended 31 December is as follows:


Corporate Domestic Capital GroupAt 31 December 2010Net interest income 42,073 38,037 28,953 109,063Net fees and commission income 13,018 29,771 42,789Net trading income - - 20,209 20,209Dividend income - - 453 453Lease income 288 3,093 - 3,381Other income - 4,267 - 4,267Operating income 55,379 75,168 49,615 180,162Loan impairment charges (1,953) (3,809) (5,762)Net operating income 53,426 71,359 49,615 174,400Total income 53,426 71,359 49,615 174,400Total assets 288,586 210,667 1,021,975 1,521,229Total liabilities 491,271 624,784 177,528 1,293,583

At 31 December 2009Net interest income 32,906 32,809 16,742 82,457Net fees and commission income 23,896 18,256 42,152Other income 6,776 9,359 19,144 35,279

Operating income 63,578 60,424 35,886 159,888Loan impairment charges (5,537) (3,981) - (9,518)Net operating income 58,041 56,443 35,886 150,370Total income 58,041 56,443 35,886 150,370Total assets 315,285 140,874 932,034 1,388,193Total liabilities 517,976 404,101 260,702 1,182,780 In the normal course of business, assets are sometimes pledged for specific purposes.The status of pledged assets is as follows:

45 Pledged assets Asset pledged

2010 2009Government securities 8,000 4,000

46 Dividend per share

At the forthcoming meeting, dividend of 20 Ghana pesewas (2009: 18 Ghana pesewas) per share is to be proposedamounting to a total of GHS 46,025,674 (2009: GHS 41,423,107).


Shareholders’ Information

20 Largest Shareholders

NAME No. of shares % holding1. ECOBANK TRANSNATIONAL INC. 202,129,934 87.8%2. GHANA REINSURANCE COMPANY LTD 3,895,030 1.7%3. SOCIAL SECURITY AND NATIONAL INSURANCE TRUST 2,168,814 0.9%4. EDC STOCKBROKERS LTD. 1,969,296 0.9%5. ANGLOGOLD ASHANTI EMPLOYEES PROVIDENT FUND 1,496,056 0.7%6. BUCKNOR JUDE KOFI 1,379,270 0.6%7. TEACHERS FUND 1,258,516 0.5%8. SCBN/BBH DZ PRIVATBANK S.A LUXEMBOURG SILK FUND - AFRICAN LIONS FUND GHANA 413,400 0.2%9. GALTERE INTERNATIONAL MASTER FUND LP 347,652 0.2%10. ECOBANK STOCKBROKERS LTD 343,251 0.1%11. SIC LIFE COMPANY LIMITED 309,760 0.1%12. EBG STAFF SAVINGS SCHEME NOMINEE 290,539 0.1%13. EDC STOCKBROKERS LTD (TRADING) ACCOUNT 283,351 0.12%14. SCBN/BARCLAYS MAURITIUS RE DEUT VICTOIRE AFRICA INDEX II IC. 278,571 0.12%15. TEACHERS FUND 261,263 0.11%16. ESL INVESTORS PORTFOLIO ACCOUNT 250,685 0.11%17. SIC INSURANCE COMPANY LIMITED 232,603 0.10%18. COCOBOD END OF SERVICE BENEFIT SCHEME 220,983 0.10%19. SCBN/UNIL GH MANAGERS PENSION FUND 214,222 0.09%20. OKUBANJO, OLOYE OLADOTUN OKUNOWO, MR 210,096 0.09%

Directors No. of shares % holdingLionel Van Lare Dosoo 3,772 0.002%Samuel Ashitey Adjei 41,260 0.018%Kofi Ansah 9,902 0.004%Mariam Gabala Dao (Mrs) 38,977 0.017%Adegboyega Oladapo A. Ojora 8,200 0.004%

Directors' ShareholdingThe Directors named below held the following number of shares in the bank as at 31 December 2010:

2010 2009Category No. of holders % of Shares held No. of holders % of Shares held1 – 1,000 12,443 3,915,075 12,060 1.601,001 – 5,000 1,262 2,361,854 1,337 1.105,001 – 10,000 175 1,168,423 175 0.5010,000 and over 154 222,683,020 156 96.80Total 14,034 230,128,372 13,728 100

Number of shareholdersThe Bank had 14,034 ordinary shareholders at 31 December 2010 distributed as follows:

1. The General Meeting hereby adopts the Statementof Accounts of the company for the year ended the31st day of December, 2010 together with the reports of the Directors and auditors thereon.

2. The General Meeting hereby approves the paymentof dividend of GHS0.20 per share and totalling GHS46,025 million on the 20th day of May, 2011 to members listed on the share register as of 20th April, 2011.

3. i The General Meeting hereby ratifies the appointmentof Mrs. Eveline Tall as a Director for a 3 year term.

3. ii The General Meeting hereby ratifies the appointmentof Mr. Ernest Asare as a Director for a 3 year term.

3. iii The General Meeting hereby ratifies theappointment of Mrs. Rosemary Yeboah as a Directorfor a 3 year term.

4. The General Meeting hereby appoints KPMG as Auditors for the Bank.

5. The General Meeting hereby authorises theDirectors to fix the remuneration of the Auditors.

Draft Resolutions 2011Ordinary Resolutions

I/WE, ......................................................................................... being a Member of the above-named Company herebyappoint ....................................................................... or failing him the Chairman of the Meeting as my/our Proxyto vote on my/our behalf at the Annual General Meeting (AGM) of the Company to be held on Thursday, April28, 2011 at 10.30 am prompt.

DATED THE .................................. DAY OF APRIL, 2011.

................................................................................MEMBER

This Form is to be used in favour of/against the Resolutions set out in the Agenda:

FOR AGAINST

Ecobank Ghana LimitedProxy Form

1. TO CONSIDER AND ADOPT the Statement of Accounts of the Company for the year ended the 31st day of December, 2010 together with the Reports of the Directors and Auditors thereon.

2. TO DECLARE a Dividend.

3. TO RATIFY the Appointment of Directors

4. TO APPOINT KPMG as Auditors for the Bank

5. TO AUTHORISE the Directors to fix the remunerationof the Auditors.

Please indicate with an "X" in the spaces above how you wish your vote to be cast. Unless otherwise instructed,the Proxy will vote as he thinks fit.

If executed by a body Corporate, this Proxy Form should bear the Common Seal of the Body Corporate and thesignature of duly authorised Officers.

To be valid, this Proxy Form must be filled up signed and lodged (together with any authority under which it issigned) with the Registrars at Ghana Commercial Bank, Registrars office, Thorp Road, High Street, Accra, not laterthan 3.00 pm on Wednesday 27th April 2011.

Documents

Ecobank Ghana Limited and its Subsidiaries