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Bank of Ghana explains SSNIT’s intention to reduce stakes in banks

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The Social Security and National Insurance Trust (SSNIT) is one of the largest depositors holding substantial shareholding in a number of banks in Ghana.

SSNIT has equity shares in six listed banks and six unlisted banks on the Ghana Stock Exchange as at December 2010. The banks are Cal Bank (34.49%), Ecobank Ghana (0.94%), Ghana Commercial Bank (29.81%), HFC Bank (24.36%), SG-SSB Limited (22.14%) and Standard Chartered Ghana (14.34%).

The rest are Fidelity Bank (15%), First Atlantic Merchant Bank (26.02%), Ghana International Bank Plc (15%), Merchant Bank (68.75%), Prudential Bank (7.65%) and The Trust Bank (61.14%).

SSNIT has notified the Bank of Ghana (BoG) that it wants to reduce its stakes in some of these banks.

The state-owned agency wants to sell its stakes in The Trust Bank (TTB) to Ecobank Transnational Incorporated, a move which has raised concerns among the public.

The Coalition for the Protection of Individual Liberties and Constitutional Rights (COPCOR) has expressed concern about the alleged sale of SSNIT’s 61% shares in TTB.

Mr George Agbenyikey Jnr, Co-ordinator of COPCOR, addressing a press conference in Accra said available information indicated that SSNIT was frantically pushing for the deal with ETI without the knowledge of government and challenged SSNIT to come out publicly to clear the air on the ‘ill-intentioned transaction’, according to a Ghana News Agency publication September 1, 2011.

But the BoG has explained why SSNIT has taken this ‘strategic’ plan.

The governor of BoG, Mr Kwesi Amissah-Arthur, who disclosed to the press on September 1, 2011 said “SSNIT itself, the Board itself has informed us that they are taking a strategic decision to reduce their shareholding in the banks for a simple reason…When you are the minority shareholder you have a certain responsibility for supervising management of the banks and they (SSNIT) don’t have the capacity to do that.”

“So they would like any other strategic investor to come in who will have more time and capacity to undertake that supervision. So that is the reason why they are doing that.”

Mr Amissah-Arthur adds “But they love to invest in the bank because they get returns that assures better pension than if they have invested in other areas of the economy.”

He said SSNIT is more of a force of stability in the banking sector than a risk since it gets returns in order to pay pensioners in the next 100 years.

By Ekow Quandzie

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