Citi Business News has gathered three local banks
Premium, GN and Sahel Sahara banks have agreed to merge.
The move follows the Bank of Ghana’s directive for all banks
to meet the minimum capital requirement of 400 million cedis this year (2018).
The three banks according to reports, commenced the merger
talks this year, and finalized the deal this month- July 2018.
The deal is however yet to be approved by the central bank
which has received the proposal.
If approved, it will be the first merger which will be
undertaken by local banks as part of moves to meet the minimum capital bank.
The Capital Requirement Directive sets the requirement by
which banks will calculate their level of capital as spelt out under the Banks
and Specialized Deposit-taking Institutions Act.
The Bank of Ghana says its implementation of the new Capital
Requirement Directive starts on July 1, 2018, although banks will be expected
to start full compliance by January 1, 2019.
Management
of new entity
Sources close to the discussions have told Citi Business
News a name and logo and other branding related issues will also be finalized
after the central bank’s approval of the deal.
Also who takes over as the MD of the three entities as well
as other top management positions will also be finalized after regulatory
approval.
It is expected that some of the workers will be laid off as
the new entity tries to avoid duplication of roles.
Premium
bank
Premium bank prior to gaining banking status was a Finance
house, under the name City Investments Company Limited.
It got the regulatory approval from the central bank to
operate as a bank in the second quarter of 2016 and begun operations as a bank
proper in the fourth quarter of 2016.
Its majority shareholder is the Vanguard group.
According to the bank’s financial statement for December
2017 its profit before tax was a little over 12 million cedis, while its profit
for the period was almost 12 million cedis.
The bank’s assets sum up to about 1.3 billion cedis while it
liabilities sum up to about 1.2 billion cedis for the period.
The bank is headed by Mr. Kwasi Tumi a Chartered Accountant.
Sahel
Sahara
Sahel Sahara is a subsidiary of the Group, BSIC (Ghana)
Limited.
Sahel commenced operations in Ghana as a universal bank, on
March 25, 2008. The Bank currently has 17 branches in 6 regions.
Its parent company BSIC is a financial institution created
by the community of the Sahel Sahara States, otherwise known as (CEN-SAD).
CEN-SAD is made up of 28 countries including; Libya, Sudan,
Benin, Burkina Faso, Central African Republic, Cote d’Ivoire, Gambia, Ghana,
Guinea, Mali, Niger, Senegal, Chad and Togo where BSIC currently has
affiliates.
The bank’s profit before tax for December 2017 was about 7.8
million cedis a drop from the 10.3 million cedis recorded the year before.
GN Bank
GN Bank was incorporated on May 30, 1997.
GN bank is owned by Dr. Papa Kwesi Nduom a business man
and politician.
The bank’s CEO is Mr. Issah Adam.
The bank has over 298 branches across the country.
Local banks beg for extension
In April this year – 2018, the President, Nana Addo Dankwa
Akufo Addo, met some Managing Directors and Chief Executive Officers of local
banks in the country to discuss the request for an extension in the deadline
date of the minimum capital requirement for indigenous banks.
The local banks appealed for an extension of the timeline in
meeting the minimum capital requirement from one year to four years.
By this, the local banks want the deadline to be extended from
December 2018 to 2022.
Though the banks admit to the idea of recapitalization, they
argue that the period requested for them to comply was short
In a letter to the President and signed by all the Managing
Directors and Chief Executive Officers of the local banks, the local banks said
they were in a better position to recapitalize up to GH¢170 million by the end
of 2018, GH¢220 million by the end of 2019, GH¢280 million in 2020, GH¢340
million in 2021 and GH¢400 million in 2022.
By:
Vivian Kai Lokko/citibusinessnews.com/Ghana
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