Boost for local banks….as Finance Ministry presents GAT request to parliament

The Ministry of Finance has laid before parliament a request for the issuance of a Sovereign Guarantee of up to GH₵2billion in favour of Ghana Amalgamated Trust (GAT) Limited to support indigenous banks.

The paper was presented to the House by Deputy Finance Minister Abena Osei-Asare, on behalf of the Finance Ministry on Tuesday.

Speaker of Parliament, Prof. Mike Oquaye, duly referred it to the Finance Committee for consideration and report.

Government announced in January a special programme to rescue five indigenous commercial banks that failed to reach the central bank’s minimum capital requirement of GH¢400million.

The GAT, a special purpose vehicle (SPV) backed by government, was incorporated in December 2018 to raise up to GH¢2billion and invest in five indigenous banks.

The beneficiary banks are the state-owned ADB Bank and National Investment Bank (NIB), as well as Universal Merchant Bank (UMB), Prudential Bank, and OmniBank which has merged with Sahel Sahara Bank.

Already, GAT has appointed Mr. Albert Essien – formerly of Ecobank, and Mr. Eric Nana Otoo, formerly of Goldman Sachs, Mckinsey and Duet, as its Board Chairman and Managing Director (MD) respectively.

The GAT has committed funds from pension funds and other investors through a bond programme, with proceeds of up to GH¢2billion to be used for equity investment in the eligible indigenous banks, as determined by the investors. The bonds issued to the Pension Funds will be listed on the Ghana Fixed Income Market (GFIM) for liquidity purposes.

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