In a joint press released on Monday 18th September, 2018, the banks announced that, this approval was contained in the Central Bank’s letter dated 14th August 2018, which stated that “the Bank of Ghana has no objection for merger talks between the two banks to commence, however, the final approval of the merger will only be considered after all the necessary documentation has been submitted for review”.
The release also said OmniBank and BSIC since then have signed ‘Memorandum of Understanding’ (MOU) to govern their intention to merge and commenced the process to meet all requirements for final BOG approval by the Central Bank.
“In view of this, we are grateful to the Bank of Ghana, our cherished customers and all other stakeholders for their support and cooperation. We are committed to supporting the Bank of Ghana in its quest to ensure stability, confidence and growth in the banking sector”, the released noted.
“We also wish to assure our customers and the investing public that this merger when finally completed, will position our Bank as a major player in the banking industry to support private sector growth and Ghana’s development agenda,” it concluded.
Following the Central Bank’s recent ‘clean-up’ of the banking sector since the collapsed of seven banks which have been consolidated by the government of Ghana, some banks are expected to merge to meet the capital requirements of the Bank of Ghana.
Some of the key things that they have to meet before final approval from the central bank include; ensuring that only fit and proper persons shall own and manage the institutions as well as comply with all applicable regulatory requirements and other prudential norms of the Bank of Ghana.
Furthermore, the two banks must indicate to the regulator, the profitability and long-term viability of the combined institution, plan for reorganization of the branches of the combined institution as well as plan for staff rationalization which must include strategies for staff downsizing if any.
The Shareholders, Directors and Management of the two Banks took a decision to merge due to, among others, the following reasons:
1. The two Banks are of similar balance sheet sizes and similar business models, and would like to continue serving the SME market due to the huge potential and impact on the economy of Ghana. The merger will create a bigger Bank with the capacity to manage the opportunities and risks thereof.
2. The combined entity will have 46 branches, spread across the country to improve service delivery to our over 150,000 customers.
3. The two banks have maintained and published unqualified audited financial statements as required by the Bank of Ghana, and have Capital Adequacy Ratios (CAR) above the BOG’s minimum requirement of 10%.
4. The two Banks have never received liquidity support from the central Bank.
5. In support of the merger, existing and potential shareholders have shown commitment to increase capital to fill the shortfall in the new Minimum Capital Requirement of GHS400 million, before the 31st December 2018 deadline. The Banks have also agreed to ensure that there will be no job losses for the permanent staff due to the merger.
The two banks together have total asset size of 1.22 billion cedis with permanent staff strength of 614.
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Source: Sammy Agyei/Frontpageghana.com/Ghana
