GCB Does Not Need Foreign Strategic Investor - Participants

A cross-section of participants at the 50th Anniversary of the Ghana Commercial Bank (GCB) in Accra on Tuesday said it did not need a foreign strategic investor to survive in the marketplace.

They said the sale of government shares would reduce its ability to use the Bank for important development processes. The participants from industry, commerce, banking, finance, manufacturing and a diplomat were of the view that money could be raised from outside to pay for the shares from time to time.

Mr K. B. Asante, a former Diplomat, in an interview with the Ghana News Agency (GNA) Business Desk, expressed concern about the intended divestiture of the 46.1 per cent government stakes in GCB saying, "it is not necessary to go looking for a strategic investor, who would virtually just source money from outside and come here to buy the stated shares, which could be done by any investor, either local or foreign".

He asked government to work hard at building and maintaining confidence in the Bank and prop it up. "It is then that we as a people can make the Bank attract foreign direct investment to turn things around and make it more competitive."

Mr Asante said, all over the world, governments used national and special banks for economic ventures and implement polices. He said it was pertinent that at this time of Ghana's development, she should be able to look within, " since it abounds in talents of all sorts to move it forward". "Always looking outside is a vote of no confidence in ourselves and what we are capable of doing," he stressed.

The former Diplomat told the GNA that government must look carefully for the right people with the right ability to deliver high-level performance. "If they fail, we fire them and bring others, who can do the job."

Mr Asante explained that when GCB was established in 1953, there were no experts in banking. "However, today Ghana Commercial Bank has one of the most qualified and competent staff across the country and beyond and indeed has former staffs in all the banks in Ghana today."

The Board of Directors and Management of GCB, however, say they wished that government would look inside the country in search of a strategic investor. The Bank recently said it had managed its affairs quite creditably and must be given a free hand to bring the changes to a fruitful end.

Mr Kweku Osei-Bimpong, Public Affairs Manager of SSNIT, said GCB could maintain its current flavour, adding: "If it is important to expose the Management and Staff to modern trends to make them competent to meet the challenges of the times, we should do so."

He noted that GCB played a very important role in meeting the needs of the lower end of the market adding that if the Bank was adequately and effectively positioned, "it can do it. What is required is that it should be encouraged and supported to do so".

Others were sceptical about finding a strategic investor, who could take up all the 130 branches of the Bank, especially those in areas where profit margins were non-existent. They contended that any investor putting money into GCB would definitely be looking back for returns; besides, business must be done according to best practices.

They cautioned that there was the possibility of embracing a strategic investor, who would agree to such terms, but later on achieving the controlling rights in the company by virtue of its share structure or the fact that it controlled Management turn to take decisions that might not be in the interest of Ghanaians.

Government on Tuesday said any strategic investor interested in taking up its 46.1 per cent stakes in Ghana Commercial Bank (GCB) could not close down any of its branches especially in non-profit areas.

President John Agyekum Kufuor, who said this, described the condition as "not negotiable". He noted that GCB had played a remarkable role to date in the development of Ghana, adding; "it is inconceivable to divest without retaining rural branches of the Bank."

Ghanaians own 53.9 per cent of GCB shares while the government owes the remaining 46.1 per cent. GCB needs 15 million dollars to computerise and network its 130 branches but government says it is unable to provide it.

It thus welcomed foreign participation saying; "in today's globalised world, nationalism and patriotism by themselves, however, passionate and well intentioned, cannot sustain a bank's success and profitability. "Hence we need a strategic investor who will make funds available to modernise the banking operations of GCB and provide the necessary know-how and sustain the banking operations," President Kufuor said.

"The concept is to strengthen Management and provide resources needed for total and thorough revamping of the systems needed to bring GCB, to an appreciable level in industry." He noted that the strategic investor idea would not necessarily entail the sale of the entire shares of government but would ensure that the basic and essential national interest in the Bank was not compromised.

"Rather the object without doubt, is to enhance and sustain this national interest. This government appreciates the central role GCB has played to date and, therefore, assures the nation it is not about to slay the goose that has been laying the golden eggs."

President Kufuor said government wanted to retool, rationalise and reinvigorate the Bank so that it could continue to lay even more golden eggs.