Dr Ernest Addison (2nd left) in a chat with journalists after the news conferrence The five indigenous banks that the Ghana Amalgamated Trust Limited (GAT) Limited is supporting to recapitalise have now met the Bank of Ghana’s (BoG)GH¢400 million capital directive, the Governor Central Bank, Dr Ernest Addison, has confirmed.
Dr Addison said the central bank considered Parliament’s approval of a sovereign guarantee for GAT as “good enough for us to recognise them as meeting the capital requirement.”
In a response to media enquiries on the capital state of the Agricultural Development Bank (ADB), the National Investment (NIB) and three other private banks, the governor said yesterday that the sovereign guarantee was sufficient for the BoG to recognise the beneficiary banks as now being capital-compliant.
The sovereign guarantee was approved on March 15, 2019 to cover 100 per cent of risks arising from a GH¢1.14 billion bond to be issued in favour of the NIB and 70 per cent of risks associated with another bond to be issued in favour of the Universal Merchant Bank (UMB), Prudential Bank, Omnic/BSIC Bank and ADB, according to parliamentary report on the transaction.
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“We at the central bank are happy with the overall guarantee that the government has given to the scheme as good enough for us to recognise that they are meeting capital requirements,” the governor said at the Monetary Policy Committee (MPC) press conference in Accra last Monday.
He added that BoG’s comfort with the GAT arrangement was because the central bank “has the necessary undertakings with the government” on the transaction.
As a result, he said the public could be rest assured that “the BoG has the undertakings that are required in order to consider those banks as having met the GH¢400 million.”
GAT formation Last December, GAT, a government-sponsored SPV, received provisional approval from the Bank of Ghana (BoG) to invest in the five banks to help build up their capitals to GH¢400 million.The move was the government’s response to constant appeals by indigenous banks that were facing challenges in recapitalising to GH¢400 million, a statement from the Ministry of Finance said at the time.Although GAT has a board, chaired by consummate banker Mr Albert Essien of Ecobank fame, and a management headed by Mr Eric Otoo, a team of investment bankers, legal practitioners […]