Last week, it was revealed by the Bank of Ghana that two of the three mergers and acquisitions involving universal banks in Ghana, of which negotiations began last year have been concluded. Omni Bank and BSIC have now become OmniBSIC Bank while First Atlantic Bank has completed its acquisition of the erstwhile Energy Commercial Bank. Furthermore, it is now clear that the final acquisition – that by First National Bank of GHL Bank – is not only irrevocably on course but indeed is at the verge of completion too.
We welcome both acquisitions, and even more particularly, the merger of Omni and BSIC if only because a merger of two equals is a more difficult course to navigate than the more straightforward acquisition of one bank by another, where one side clearly has the upper hand in the requisite negotiations.
To be sure, consolidation has been a key goal of the central bank right from the start and in fact, many industry analysts had expected more mergers and acquisitions at the start of the recapitalization process than has actually occurred. However, if the seven banks that have been rolled into one Consolidated Bank Ghana are also taken into consideration, then consolidation has been achieved in appreciable measure.
All the resultant entities have stronger capital than hitherto, more branches and better quality human resources. They will expectedly also benefit from better economies of scale too.
But while all the resultant merged banks are enthusiastically announcing these benefits to the banking public, the one that has gone unstated is the one of most crucial importance – the de-concentration of ownership that will result in better corporate governance and by extension better risk management, which ultimately will translate into more safety for depositors’ funds.
We particularly welcome the decision by OmniBSIC to retain all its staff; this indicates that its increased capital base will be used to expand its activities and spatial reach rather than just a bigger armoury for financial trading. To this end we hope that as much as is viable the other merged banks will follow this welcome example.
We now call on all the resultant banks to strive to make the most of their composite parts, with regards to both their operational capacities and their market positioning. For example OmniBSIC Bank should seek to combine Omni’s exemplary skills in providing banking services to small and medium sized companies, with BSICs peculiar skills in facilitating intra-regional trade with the aim of giving Ghanaian SMEs access to regional export markets.
Similarly, First Atlantic’s corporate banking skills should be complemented by Energy Bank’s retail banking capacities. In the same vein, First National’s excellence in digital banking and its adherence to international best banking practice can be combined with GHL Bank’s deep local knowledge of Ghana’s business markets and its unparalleled skills in mortgage financing.
We expect all three resultant banks to be more than the sum of their respective component parts and we welcome them into Ghana’s restructured, better and stronger banking industry.