NIB's qualification for bail-out despite 3-year unaudited account questioned
The government has been criticised for lack of fairness in its selection of banks for a bail-out after they failed to raise the new GH¢400 million capital requirement.
According to Banking consultant Richmond Atuahene, at least one of the five banks selected does not meet the criteria set by President Nana Akufo-Addo to rescue local banks.
He quoted the president saying only well managed local banks will be supported as Ghana’s financial service sector undergoes reforms.
To this end, five banks have been earmarked for a bail-out through the newly established Ghana Amalgamated Trust which will disburse the top-ups using pension funds.
They are Agricultural Development Bank (ADB), National Investment Bank (NIB), OmniBank Ghana Limited/ Sahel Sahara Ghana (OmniBank / BSIC), Universal Merchant Bank (UMB) and Prudential Bank are on course to receive a top-up after they failed to meet the December 31, 2018 deadline to raise GH¢400 million cedis as capital.
But a stateowned bank NIB, he said, has for the past three years failed to present audited accounts which is against good corporate governance.
“Is it fair to the others”, he said on Joy News Saturday analysis show, Newsfile. Atuahene also claimed NIB had questionable books requiring the appointment of an advisor.
“By law, once you appoint an advisor it means there is something in there that had to be looked at by an independent advisor”, he told host Samson Lardy Anyenini.
Richmond Atuahene was emphatic, the support for NIB will not change the fortunes of the struggling bank. This is because NIB was once bailed out by the Mills government to the tune of ¢120m to no avail.
He expressed surprise at government shying away from describing the support as a bail-out. The banking consultant said any government support to a financial institution is a bail-out.
“It is a matter of semantics”, he said.
The selected banks are expected to receive a total of ¢2 billion in financial support for capitalisation. Already government has pumped ¢11.56bn in consolidating nine banks whose licenses have been withdrawn. This figure amounts to 3.5% of Ghana’s GDP, the expert said.
Spending an extra GH¢2bn to support five more banks brings to GH¢13.56bn the total amount of money government has pumped into the banking sector reforms.