CONTROVERSY DOGS FIRST BANK’S TAKEOVER OF GHANA’S ICB

There are indications that the handover of Ghana’s International Commercial Bank to First Bank of Nigeria may be running into controversy. This is sequel to the Office of the President of that country’s recent directive that the Bank of Ghana should consider Ghanaian companies in the acquisition of the bank.
According to a source, President John Dramani Mahama had, through his Chief of Staff on August 29, 2013, written to the Governor of the Bank of Ghana, Dr. Kofi Wampah, that since the government put premium on the interest of Ghanaians first before any other thing, “the Bank of Ghana is, therefore, requested to be guided by this policy in handling all transactions on the acquisition of the ICB.”
But the Central Bank, in a statement titled: “Acquisition of International Commercial Bank Ghana Limited” and signed by its Secretary, Andrew Boye-Doe, in Accra on September 24, 2013, announced its approval of the sale of the ICB to First Bank of Nigeria (FBN), arguing that the directive was from ICB Financial Holdings AG, the largest shareholder of ICB.
A source close to FBN said any such controversy is left for the Bank of Ghana to sort out with the country’s Presidency.
The terms of the approval provide that First Bank of Nigeria offloads at least 40% of the shares to Ghanaians through private placement and/or the Ghana Stock Exchange, of which, at least, 25 percent should be offloaded by December 31, 2014, and the remainder not later than December 31, 2016.”
Some members of the Ghanaian parliament, peeved by the apparent defiant stance of the Bank of Ghana, have called on President Mahama to use the powers entrusted in him by the Constitution to halt the sale of ICB to FBN, since the move does not serve the interest of Ghanaians.
The transaction for the takeover of Ghana’s ICB by FBN took place earlier this year. According to sources close to the deal, due diligence for the takeover had been completed in December 2012 and the deal proper was sealed in January 2013.
It was a move that marked First Bank’s first major outing in West Africa, a field that had been explored by other competitors.
International Commercial Bank Ghana is part of a group that comprises a network of 12 banks stretched across three continents; Asia, Eastern Europe and Africa. ICB commenced operations in Ghana in 1996.
The primary focus of ICB has been the provision of financial services to small and medium-sized enterprises within the economy.
First Bank’s acquiring ICB was expected to lead to the birth of one of the biggest SME banks in Ghana, one of West Africa’s major financial hubs.
First Bank was rated the most valuable Nigerian bank two years ago as well as the best retail bank last year.
In 2012, the Brand Finance Banking League tables rated it in the top 500 most valuable banking brands worldwide.
The bank’s 2012 market capitalisation stood at N290.43 billion, one of the largest in the sub-region. It is not clear whether the bank plans to explore new frontiers in the sub-region to explore its business potential as this is one area First Bank seemed to have avoided over the years while its Nigerian competitors foraged into it.
ICB Banking Group also referred to as ICB Financial Group, but commonly known as International Commercial Bank (ICB), is an International financial services provider based in Schindellegi, Switzerland, with subsidiaries in Eastern Europe, Africa and Asia. The parent company of the group is known as ICB Financial Group Holdings AG, whose stock is listed on the London Stock Exchange.
As of December 2009, ICB Banking Group was a large financial services provider with total assets in excess of US$1.32 billion and shareholders’ equity in excess of US$200 million.
The group began banking operations in 1994 when it was granted a licence to operate a bank in Hungary. Since then, the ICB Banking Group has established or acquired commercial banks in Eastern Europe, Africa and Asia. As of May 2009, the group operates banks in 13 countries in three continents.
The group began operations in Africa in 1996 and today has a presence in nine African countries. In 2003, the group entered the Asian market by acquiring an indirect stake of 11.3 percent in Bank International Indonesia, one of the largest banks in Indonesia. Through subsequent acquisitions and start-ups, ICB today operates in three Asian countries.
In 2004, the individual ownerships of the ICB Banking Group were incorporated under the umbrella of ICB Financial Group Holdings AG, a Swiss based holding company. On May 17, 2007, ICB Financial Group Holdings AG was listed on AIM market of the London Stock Exchange.
Source: Daily Newswatch