Business News of Monday, 17 September 2018
Omibank and Sahel Sahara Bank have signed a Memorandum of Understanding (MoU) to aid its planned merger before December this year.
This was after the two financial institutions secured a no objection to the process in a letter dated August 14, 2018, from the Bank of Ghana (BoG) on their planned “marriage”.
News of the merger was contained in a formal statement issued by the two commercial banks.
The no objection should mean that the two banks can commence the process to meet all the requirement before the BoG’s final approval.
Reasons for merger
According to the two banks, their reason to merged was based on the two banks being of similar balance sheet sizes and similar business models.
They 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.
Also, the combined entity will have 46 branches, spread across the country to improve service delivery to our over 150,000 customers.
Setting the records straight on status of the two banks
The two banks say they 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%.
They also stated that they have never received liquidity support from the Central Bank.
“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 ¢400 million, before December 31, 2018 deadline”.
The Banks have also agreed to ensure that there will be no job losses for the permanent staff due to the merger.
Conditions from BOG on the “no objection” for merger
The letter from the BoG, however, stated that the no objection would be considered after only all the necessary documentation has been submitted for review.
Profile of the two banks
OmniBank is a Ghanaian owned bank which started in 1989 as a Savings and Loans Company with focus on small and medium-sized enterprises (SMEs). Since becoming a bank in July 2016, the bank has provided finance for a wide range of sectors including trade, manufacturing, construction and services as well as private individuals and institutions.
As a subsidiary of BSIC Group, BSIC (Ghana) Limited started its operations as a licensed universal bank, under the trading name ‘Sahel-Sahara Bank’ on 25th March 2008. The BSIC Group itself has a stated capital of 500 million Euros. The BSIC Group is jointly and severally owned by fourteen (14) African countries including Benin, Burkina Faso, Central African Republic, Chad, Cote d’Ivoire, Gambia, Ghana, Guinea, Libya, Mali, Niger, Senegal, Sudan and Togo.