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23.05.2007 General News

TTB and MBG merger talks raise concerns

By myjoyonline

Employees of both The Trust Bank (TTB) and the Merchant Bank Ghana (MBG) Limited have been assured that their jobs are secured if the proposed merger between the two banks is completed by close of the year.

The two banks are currently in serious merger talks, which will create a combined business set to position it as the fourth biggest bank in the industry with an assets size of almost ¢5 trillion.

This is the first of mergers being anticipated in the industry by banking analysts because of the relative small balance sheet size of some of the 23 banks in the country.

The total asset size of 22 banks amounts to ¢51.94 trillion, an equivalent of US$5.5billion which is seen by analysts as quite small to help undertake the level of intermediation required to position the country as a financial hub of West Africa.

Typical of mergers and acquisitions, there is anxiety over possible job losses because of duplication of duties and also the need to right size the business to make it more competitive.

There are also speculations over the appointment of the chief executive of the new business.

Mr. Isaac Owusu Hemeng, Managing Director of TTB in an interview with the B&FT dispelled all the anxieties surrounding the proposed merger.

"The prime objective of the merger is to expand the operations of the two banks and therefore the staff of the banks need not worry over job cuts or redundancy.

"But if a member of staff is not performing then he would by all means be kicked out from the team," he explained.

Meanwhile, the Union of Industry, Commerce and Finance Workers (UNICOF) of the Trades Union Congress says it is closely following the merger process.

The General Secretary of UNICOF, Mr. Kofi Davoh said he is not anticipating any serious job losses, but if it happens, management will have to justify it.

Labour analysts believe that the top management of the two banks would be the most affected parties, "the lower your rank, the more secured will be with your position."

The B&FT says it also learnt that a decision is yet to be taken on the name of the new business, as well as the managing director and the new executive team.

On the appointment of managing director, analysts strongly believe that neither of the managing directors of the two banks should be appointed, but a neutral person who will manage the transition in an unbiased manner which will be acceptable to all stakeholders, particularly employees, should be appointed.

Currently, officials of TTB and MBG have been meeting on a regular basis to smoothen all rough edges leading to a successful merger.

TTB attained a profit before tax of ¢77.96 billion with an asset base of ¢1.23 trillion while MBG posted a profit before tax of ¢135.78 billion with a balance sheet size of ¢3.35trillion.

Credit: Business & Financial Times

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