The Bank of Ghana has given OMNIBANK Ghana Limited (OmniBank) and Sahel Sahara Bank (BSIC), the all clear for the two to begin the merger process.
Subsequently, the two banks have started integrating their operations into one entity after the BoG granted a ‘no objection’ to their earlier decision to merge.
The integration process is to help create a bigger bank with a stated capital in excess of the GH¢400 million before December this year.
When concluded the merged bank will also have 46 branches across the country and a customer base of more than 150,000.
A press statement from the two banks said the BoG decision was communicated to them on August 14, this year, paving the way for actual consolidation to begin.
It explained that a final merger of the two banks would, however, be subject to approval by the central bank.
The statement said consequent to the BoG decision, management had “signed a heads of terms (memorandum of understanding) to govern their intention to merge and commence the process to meet all requirements for final BoG approval.”
“In view of this, we are grateful to BoG, our cherished customers and all other stakeholders for their support and cooperation.
“We are committed to supporting BoG in its quest to ensure stability, confidence and growth in the banking sector,” the statement, signed by the Managing Director of OMNI Bank, Mr Philip Oti, and the deputy Managing Director of Sahel Sahara Bank, Dr Kojo Aboagye-Debrah, said.
It added “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.”
While Omni Bank is a member of the Jospong Group, Sahel Sahara Bank is part of the BSIC Group, headquartered in Sirte, Libya.
The bank is owned by 14 African countries, including Ghana.
The agreement establishing it was signed by President Nana Addo Dankwa Akufo-Addo in 2008 when he was the Minister of Foreign Affairs.
It absolves the bank from paying dividend and taxes to the state but also bars it from repatriating profits.
That was to allow for a plough back of all profits for the benefit of the local economy.
The deputy Managing Director of BSIC, Dr Aboagye-Debrah, told the Daily Graphic that the bank had since been abiding by those regulations, Maxwell Akalaare Adombila reports.
“We are virtually an indigenous bank because everything we do is for the benefit of the local economy,” he told the paper at the weekend.
This, he said informed the decision to merge with OMNIBANK, which is also 100 per cent indigenous.
Why the merger
The press statement explained that the two banks decided to merge to build a bigger and stronger bank.
It said the two banks were of similar balance sheet sizes and similar business models.
That, it said meant that the two banks could continue serving the small and medium enterprise (SME) market due to their huge potential and impact on the economy of Ghana.
It said over the years, the banks had maintained and published unqualified audited financial statements as required by BoG and had Capital Adequacy Ratios (CAR) above the minimum requirement of 10 per cent.
It added that none of them had ever received liquidity support from the central bank. — GB