Business News of 2014-06-02

NIB takes over First Ghana Savings and Loans

The National Investment Bank (NIB) will recapitalise the First Ghana Savings and Loans Limited (FGSL) with about GH¢12m to enable the company to meet its minimum capital requirement set by the Bank of Ghana.

The process will see the bank releasing GH¢5 million each in June and August this year to FSGL, while the remaining amount of about GH¢2 million will be released in December this year.

With a resolution to that effect passed by the shareholders, NIB is set to own more than 90 per cent of the company, thereby making it the majority shareholder.

At the Extraordinary Annual General Meeting of FGSL in Accra on Wednesday, the Board Chairman of First Ghana Savings and Loans, Mr Ernest Mawuli Agbesi, said the move was intended to allow the company to meet the December 31 deadline set by the industry regulator or face complete shutdown.

“We hope the recapitalisation will put FSGL on its rightful position in the financial industry to enable us appreciate the wealth of our investment the next time we meet here”, he told a handful of shareholders of the company in Accra.

The financially distressed and dormant company, then First Ghana Building Society, has been recording heavy losses for more than five years; a situation which nearly forced it into liquidation.

Strategic Plan

In its quest to ensure that the fresh capital is not wasted, Mr Agbesi, who is also the Chief Executive Officer of NIB said, “a strategic plan has been put in place to increase the scope of operations of FGSL to include small and medium-scale enterprises (SMEs) and other business loans in addition to its tradition of mortgage lending.”

The extraordinary general meeting, therefore, authorised the directors of FGSL to carry out the recapitalisation and also sell additional shares to interested members from June to December, 2014.

The board chairman used the opportunity to apologise to the shareholders for the inability of the company to pay dividends to shareholders since 2009 and pledged the commitment of management to ensure that new capital injection would help them to turn the company around.

“With these new funds, we will be able to take up big ticket transactions to place us in a better position to compete in the market,” he explained.

FGSL Financials

Total income of FGSL fell from GH¢2.8 million in 2012 to GH¢2.51m in 2013; representing a negative variance of 10 per cent.

However, deposits rose by 12 per cent from GH¢10.41 million in 2012 to GH¢11.6 million in 2013.

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