No GCB Branch Will Be Closed -JAK

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

President John Agyekum Kufuor, who said this at the 50th Anniversary celebrations of GCB in Accra, described the condition as "not negotiable".

The President said GCB had played a remarkable role to date in the development of the country adding, "it is inconceivable to divest without retaining rural branches of the Bank."

Members of the public own 53.9 per cent of GCB shares while the government owes the remaining 46.1 per cent.

The Board of Directors and Management of GCB wished that government would do its utmost to look inside the country in search of a strategic investor.

President Kufuor said there was no doubt that GCB needed 15 million dollars to computerise and network all its 130 branches to modernise and be competitive in the banking industry.

However, the government says neither it nor the Bank could provide the amount. It said in today's globalised world, nationalism and patriotism by themselves, however, passionate and well intentioned, could not sustain a bank's success and profitability.

The President said it was in this regard "that 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 was to strengthen the Management and provide resources for total and thorough revamping of the systems that were needed to bring GCB to the cutting edge of the banking 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 for the nation long into the future.

GCB is one of the most profitable equities on the Ghana Stock Exchange. Ghana Commercial Bank Limited, formerly Bank of the Gold Coast, was established in 1953 and charged with the provision of banking services to the emerging nation for socio-economic development.

In particular, the Bank was to pay special attention to the requirements of Ghanaian traders, businessmen and farmers, who hitherto lacked the needed financial support from the then expatriate banks. In addition it was to function as a Central Bank.

On Ghana attaining independence in 1957, the Bank of Ghana was established to be responsible for the central banking needs of the country. The Bank of the Gold Coast was then renamed Ghana Commercial bank to focus on commercial banking services.

President Kufuor, who was himself a staff of GCB in 1964 in London, for three months when he was a young lawyer, paid tribute to the founding fathers of the Bank and said government had no ideological hang-ups in the matter, "it only seeks to bring GCB into the modern age and empower it to compete favourably on the market.

"In so doing, government hopes to enable the Ghana Commercial Bank realise in the 21st century, the reasons why it was established 50 years ago; that is to support indigenous businesses to grow."

GCB, the President said, ought to build on the widespread goodwill it had among the population to become an internationally competitive and successful Bank.

He congratulated the Bank, which he said, had not only confounded sceptics and survived but it had also become part of the fabric of Ghanaian nationhood.

President Kufuor acknowledged GCB's role in assisting government in expanding and opening up the country for development sometimes without dwelling too much on profit considerations.

He expressed regret that apart from GCB, most banks in the country "dread" sustaining branches in many parts of the country.

"The Bank is certainly matured and should be encouraged to constantly review and rationalise its operations to face the challenges posed by the times."

Mrs Matilda Obeng Ansong, Managing Director of GCB, said the Bank had come a long way and was proud to say that it was performing creditably.

She said GCB had established and maintained long-term relationships with many firms ranging from those engaged in construction, mining and crude oil import and with small and medium enterprises.

"Our contribution to these sectors is reflected in the improvement of these sectors, especially in construction, which has seen extension of communication links to all parts of the country especially to the rural areas."

Mrs Obeng-Ansong said GCB was well represented through out the country for a purpose.

"Aside of inculcating banking habits to a sizeable proportion of the population, it is to enable the Bank play a leading role in the development of indigenous enterprises in the country."

She noted that GCB had tried to develop through various means, indigenous enterprises in commerce and other fields to facilitate the economic development of the country.

Mrs Obeng-Ansong said GCB had undergone significant restructuring since competition and globalisation demanded that GCB changed with the trend.

"Between 1998 and 1999 for example, ... our branches were rationalised and we did rightsizing of our staff numbers and in this we did away with some structures and appendages we have built over the years and now concentrate on our core business."

"GCB has created a Corporate Banking Division, to place emphasis on our corporate customers and improved the information technology base to meet industry competition," Mrs Ansong said, adding; "we have computerised 86 branches with 25 on wide area network".

The number is expected to increase to 100 by the end of the year with 50 on the wide area network.

For the future, she said GCB would effectively support the agricultural sector with micro and small enterprises in both rural and urban communities.

Mr Kwabena Gyimah Osei-Bonsu, Chairman of the GCB Board, said globalisation had diminished the role of government while enhancing the power of business.

"Ghana is no longer insulated in our liberalised regime ... we cannot be complacent ... we are poised to face these challenges," he said.