Bank of Ghana to sell shares in two domestic banks
The Bank of Ghana (BoG) is set to let go all its equity shareholding in two domestic banks, a government letter to the International Monetary Fund (IMF) has disclosed without naming the two banks.
The BoG move is to show it remains committed to the objective of reducing its direct equity interest in banks, according to the letter dated June 20, 2012 and signed by Finance Minister, Dr Kwabena Duffuor and Dr. H. A. Kofi Wampah, Deputy Governor of the BoG.
But the move must get approvals from authorities. “For the remaining two banks in which it continues to hold equity interest, one requires Parliamentary approval to convert from a statutory corporation into a limited liability company so it can list on the Ghana Stock Exchange (GSE), while the other requires government approval as the principal shareholder,” text of the letter said.
It continues “The Bank of Ghana will sell its shares once these hurdles are cleared.”
The two banks are said to be facing challenges when it comes to meeting the BoG’s December 2012 deadline for the minimum capital requirement of GH¢60 million, a worry which may compel the central bank to extend the deadline, the letter indicated.
Meanwhile, in the same letter to the IMF, the Board of Ghana’s Social Security and National Insurance Trust (SSNIT) has also agreed to “dilute its shareholdings in the banking industry”.
“…it has disposed of all its shares in one bank in which it has majority ownership (more than 50%), and merged its majority stake in another participated bank, thereby reducing its equity from 61% to just 14%,” the letter indicated.
For the third bank, officials say it has had to provide tier 2 Capital to bolster its operations, while looking to a conclusion of discussions with the strategic investor to buy out SSNIT by taking a majority stake.
SSNIT may need to convert this to equity to meet the impending deadline, while it continues to pursue options for divesting its shares in the bank, the letter stated.
By Ekow Quandzie