NIB needs cash, liquidity not restructuring – Banking consultant disagrees with Minority

A banking consultant, Dr. Richmond Atuahene, has disagreed with suggestions to restructure the National Investment Bank.

According to him, what the bank needs is liquidity not restructuring.
The minority had earlier proposed that instead of handing over the operations of NIB to the Agricultural Development Bank, it would be beneficial to restructure NIB’s balance sheet.

This will convert loans and all debts owed into equity. But Atuahene said restructuring does not solve the problem since this does not give the bank liquidity

“NIB doesn’t need equity so the government cannot turn the unpaid loans into equity. NIB needs liquidity; it needs cash and is not about restructuring the financial position. If you convert the unpaid loans into equity, that’s not cash injection. NIB is cash-strapped. So, we need someone to bring in liquidity after clearing the bad debts so the bank can run,” he was quoted by citinewsroom.com.

Dr. Atuahene further said the move to merge NIB with ADB is not the right choice since the Agric Development Bank is currently not in the position to take on NIB

“We should only make sure that there is a proper cash injection from all the loans so the bank can come back. Looking at the current position of NIB for a takeover, it is not ADB because ADB doesn’t have the strength,” he added.

SSD/NOQ

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