Managing Director of ADB, Dr John Kofi Mensah and Dr John Kweku Asamoah – NIB MD The government of Ghana has cancelled its plans to merge the Agricultural Development Bank (ADB) and the National Investment Bank (NIB) into the proposed National Development Bank (NDB).
The cancellation is to allow both banks to recapitalise and revamp its operations.
The Daily Graphic said that the merger was cancelled in October at the request of President Nana Akufo-Addo.
It is reported that the President said the government will resource the two banks individually to ensure that they play their traditional roles of stimulating investments in the manufacturing sector and transforming agriculture and agro-processing through strategic lending.
The government is therefore expected to announce the merger cancellation through the Ministry of Finance in the coming days.
This is to allow the banks use different methods to boost their capitals to GH¢400 million by December 31.
Confirming this news the Managing Director of ADB, Dr John Kofi Mensah, said the merger has been cancelled. He added that discussions ongoing on how to recapitalise the bank.
“It is sure that we will meet our capital requirement before the deadline ends.”
The 2 banks which are largely owned by the government of Ghana need to raise the needed money to ensure that they meet the Bank of Ghana’s (BoG) new minimum capital requirement of GH¢400 million before the year ends.
According to the financial statements of the two banks, ADB and NIB have GH¢275.1 million and GH¢70 million respectively as stated capital.
This means that the government and the BoG will need almost GH¢500 million to recapitalise the two banks to the new level of GH¢400 million. Government shares More than 92 per cent of the ADB, which is listed on the Ghana Stock Exchange (GSE), is owned by the government and the BoG through its subsidiary, the Financial Investment Trust Limited (FIT), leaving the remainder for retail investors and staff of the bank.The government also owns about 95 per cent of NIB, leaving the rest for individual investors.