'It’s not a merger'; the banks were already 'kaput' – Joe Jackson

The fusing together of The Royal Bank, BEIGE Bank, Sovereign Bank, The Construction Bank and uniBank as Consolidated Bank Ghana Limited, cannot be referred to as a merger since the banks were already “kaput” – to wit – collapsed, and the Bank of Ghana merely put them together, Financial Analyst, Joe Jackson, has said.

Governor of the Bank of Ghana, Dr Ernest Addison explained on Wednesday, 1 August 2018 that the move was part of measures to streamline the financial sector.

Reacting to this development on the Executive Breakfast Show (EBS) on Class91.3FM on Thursday, 2 August 2018, Mr Jackson told show host Moro Awudu that: “I don’t call it a merger; five banks were kaput and then the Central Bank has set up a completely new institution, completely new, protecting the depositors of those banks that have gone ‘kaput’, that’s what has happened.

“Any attempt to call it a merger, what merger? Who is merging with whom? The Central Bank has consolidated the deposit liabilities into one institution, if you like call it that, but really, it is no merger, there is nothing, a merger between whom and who? Which institutions and which shareholders or Board have agreed to this? The Central Bank essentially says: ‘You’re insolvent and you won’t survive and I’m throwing good money after bad...”

According to the BoG, The BEIGE, Sovereign and the Construction banks obtained their banking licences under false pretences through the use of suspicious and non-existent capital, whereas The Royal Bank had non-performing loans which constitute 78.9 per cent and uniBank had a capital deficit of GHS7.4 billion compared to the regulatory minimum of GHS400 million.

The newly-established Consolidated Bank is fully owned by the Government of Ghana, with a start-up capital of GHS450 million.