BoG will not object to sale of Merchant Bank — Governor
The Bank of Ghana says it will not object to the sale of Merchant Bank Ghana to First Rand of South Africa.
In a telephone interview with the Daily Graphic, the Governor of the Bank of Ghana, Dr Henry Kofi Wampah, to confirm a statement on the sale,he said the Central Bank wanted all stakeholders to agree to the terms of the sale before giving its blessing.
According to a statement copied to the Central Bank, in principle, it had no objection to the takeover. It however, noted that there had been some "public interest" concerns which were being resolved by SSNIT, Merchant Bank and First Bank and added that it believed these concerns would be addressed soon to pave the way for the approval.
The Bank of Ghana also said in the statement that it had received and reviewed an application for a 75 per cent stake in Merchant Bank by First Rand.
South Africa's second biggest financial group, First Rand, wants to buy 75 per cent stake in Merchant Bank for GH¢176.4 million.
“We are only facilitating discussions between the stakeholders of the bank (MBG) to come to an agreement before we can approve of the sale,” Dr Wampah said.
South Africa’s largest bank has proposed to pay US$91 million or 746.2 million rand for a 75 per cent stake in Merchant Bank to expand its presence on the continent.
FirstRand’s investment will comprise an acquisition of shares from existing shareholders worth GH¢ 140 million and a subscription of new shares for a value of GH¢ 36.4 million.
The transaction excludes some loans on MBG's balance sheet, which existing shareholders will acquire and continue to collect outstanding balances.
But the Managing Director of Merchant Bank insists that the takeover is good and he is looking forward to partnering FirstRand.
“We look forward to welcome FirstRand as a strategic partner to MBG to reposition the bank for its future growth,” he said.
Merchant Bank currently has 21 branches and the Bank of Ghana (BoG) is yet to approve the deal.
Even before the Bank of Ghana approves the transaction, a subsidiary of First Rand, RMB, has already secured juicy deals in the oil and gas and the property industries in Ghana.
First Rand is seeking to generate incremental growth outside its domestic market. It executes on the ground through its operating franchises and enters each market depending on the specific growth opportunities presented.
On the broader African continent, the South Africa bank has been targeting countries such as Mozambique, Tanzania, Zambia, Nigeria, Ghana and Kenya.
Merchant Bank’s Managing Director, Mr Joe Tetteh, had in an earlier interview stated that “the merger will provide Merchant Bank with the necessary skills, products, relationships and experience to re-establish the bank as a leading bank in Ghana.”
Workers of Merchant Bank have already sent a five-page petition, which was sighted by the Daily Graphic, to the President and Governor of the Bank of Ghana. The petition paints the bank as being in a dire state and in need of an investor to salvage it.
Story: Suleiman Mustapha