Merchant Bank staff optimistic about better future

Staff of Merchant Bank Ghana Limited (MBG) have expressed optimism about the future of the bank, following what seems to be the successful change of its ownership structure and the appointment of a new managing director.

Last week, Fortiz Equity Fund Limited, the new owners of the bank, announced Ms Nilla Selormey, formally of Ecobank Transnational Incorporated (ETI), as the Managing Director of the reconstituted Merchant Bank executive management team. 

A release from Fortiz said Ms Selormey, who is a banker by profession and has worked in the banking industry for close to 25 years, will be taking office in January, next year.

Some staff  of the Graphic Business engaged after the announcement of the new MD for the bank, reposed confidence in the new MD and noted that they could only trust the new owners of the bank to put in the necessary structures in place to turn the fortunes of the once formidable bank around for the better.

Speaking on grounds of anonymity, the staff, both at the management and unionised level said the issue for them was not about how much the shareholders have made but how the new owners and the MD for that matter, intend to turn around the persistent loses made over the years into profits.

“To me it is about job security, seeing the bank return to profit ways and most importantly, the new management going after the debtors of the bank whose mistrust and dishonesty has brought the bank to its knees”, one management staff said.

He said “what people need to understand is that, the more the bank stays in the hands of the Social Security and National Insurance Trust (SSNIT) and SIC Life, both state controlled, the woes of the bank will deepen”.

He explained that with the bank under the influence of any government, pressure to release monies to companies and individuals who are cronies to some members in government without the necessary due diligence, will continue and that will affect fortunes of the bank.

A unionised staff on the other hand said,  “what sense does it make for the shareholders to be recapitalising the bank using pension funds without making profits”.

“To me, it is better for the shareholders of the bank to wash their hands of the bank to save contributors of the pension scheme than to recapitalise it all the time without making any positive returns”, she said.

Others called on the public to mount pressure on the bank to release the names of the debtors of the bank to enable the people to make a judgement on whether the bank should be sold to prevent the release of funds to individuals and companies without any solid proposals that could tell how they could service the huge loans they claim.

“We have no choice than to have confidence in the new management and rededicate ourselves to duty and help them to grow the bank”, one staff said.

Another asked the various groups pursuing the sale of the bank in court to “cease fire” because of the impact of the negative press on the fortunes of the bank.

“The bank has very trustworthy customers and we need not do anything to get them to take their monies away to worsen the plight of the bank”, he said, adding that “with the hulabalu about the sale, the bank has lost a substantial number of customers to competition and the remaining left must be protected”.

Account closures

Reports reaching the Graphic Business indicated that the bank had lost more than 20 per cent of its clientele because of the uncertainties surrounding the ownership of the bank in recent times.

The paper gathered that, as the controversy rages, the bank’s competitors were also finding subtle means to cash-in on the situation to compel customers of Merbank to withdraw their funds before it is liquidated or declares bankruptcy.

One customer of the bank who only gave her name at Nana Pokua said, “I do not feel comfortable keeping my money with the bank because I fear I must lose it.

“I love the bank because it has been able to provide my needs which have helped me turn by business around but now I feel confused about what is happening and I pray these noises end for the management to concentrate on the business”, she added.

SSNIT breaks silence

SSNIT fully endorsed the sale of Merchant Bank Ghana (MBG) to Fortiz Private Equity Fund Limited (Fortiz PEF) on grounds that the transaction was in the best interest of the Fund and its contributors.

A confidential report on the deal said the pension fund manager was satisfied that all procedural steps had been undertaken in a transparent manner, while in-depth due diligence was properly conducted to ensure that the sale was of benefit to the Trust, including assured generation of profits instead of the perennial losses which had threatened the collapse of the bank, with associated contagion effect on the banking industry.

“They have also underwritten 30 per cent of the loan debt and further given SSNIT and SIC Life an option to use 70 per cent of the remaining debt (beyond the 30 per cent they have underwritten) to buy more shares in MBG,” the report said.

Court suit

Again,  last week, the Executive Director of the Centre for Freedom and Accuracy, Mr Andrews Awuni, lost his bid to stop the sale of Merchant Bank Ghana Limited to the Fortiz Private Equity Fund when the Commercial Division of the High Court dismissed his application for lack of capacity.

According to the court, presided over by Mrs Justice Sophia Rosetta Benasko Essah, granting Mr Awuni’s capacity would  tantamount to power parity and usurpation of the power of the board of the SSNIT by any contributor to the trust.

The court upheld the application of Mr Tony Lithur, counsel for Fortiz, challenging the capacity of Mr Awuni to sue for an injunction to be placed on the sale of Merchant Bank.

Meanwhile, Counsel for Mr Awuni, Mr Egbert Faibille Jnr, soon after the ruling, filed an appeal at the Court of Appeal against the ruling.

The future of MBG

Should the appeal succeed, it is not clear the future of the bank as SSNIT does not intend to release any more funds to recapitalise the ailing bank on grounds that a continuous recapitalisation of the bank will impact on the pension funds of contributors.