Aug 2013 Financial News

Republic gains majority stake in Ghana bank

Aug 05, 2013

Republic Bank Ltd has acquired a majority stake in Ghana’s HFC Bank Ltd and is prepared to make an offer for all the remaining shares in the bank if it is mandated to do so.

“Republic Bank continues at this time to engage in discussions with the SEC and the Bank of Ghana (BoG) regarding the possibility of a waiver of the mandatory offer, but is prepared and able to make an offer for all of the remaining shares in HFC Bank should it be mandated to do so by the regulators,” the bank said a statement signed by Robert Le Hunte, Country Manager for Ghana and sub-Saharan Africa.

After increasing its shareholding in HFC to 32.02 per cent earlier this year, Republic Bank was required by Ghana’s Securities and Exchange Commission (SEC) rules to make a mandatory offer to take over the local bank. Republic, however, asked SEC to grant it a waiver.

While SEC has declined the request, necessitating the take-over of HFC, the BoG, citing the strategic importance of HFC in the construction industry and the possible reaction of the public, said it wanted Republic Bank to acquire up to a 40 per cent stake within the next 12 months — pitching the banking industry regulator against the SEC. The BoG and SEC are currently in consultations about the way forward in light of the recent developments, according to SEC boss Adu Anane Antwi.

“Our position is that they must make a mandatory offer, but the BoG says it may raise some concerns. Our rules are our rules, but they also think this will affect the banking industry. So we are still talking,” he said.

Charles Acquah, Executive Director for Business Development and Marketing of HFC Bank, said: “Because Republic Bank is new in the country, it doesn’t think it will be in its interest—or that of HFC—to do the takeover bit. “They would like to start gradually before taking more shares. What the SEC says they should do, the Central bank says it will not approve.”

Dubai’s Abraaj Group last week announced that it has sold its stake in HFC Bank to Republic Bank—without giving details of the value of the transaction. “Our investment in HFC was well-timed, as we capitalised on the rapid growth in the banking sector in Ghana,” said a statement from the group. Republic Bank said it is aiming to replicate its success in financing and playing a significant role in T&T’s oil and gas sector—as well as the mortgage market—in Ghana.

“Republic Bank’s collaboration with HFC has from inception been cordial and open, and continues to be so as it seeks to add value to the latter bank’s offerings and ability to serve the needs of the Ghanaian public.

Republic Bank has a proud legacy of service in all markets which it serves, and every acquisition and merger in which it has engaged has created value for all stakeholders—including its customers and the people of the respective countries,” the bank said. Republic Bank initially purchased an 8.9 per cent stake in HFC in December 2012, and increased its shareholding to 32.02 per cent following the acquisition of shares previously held by the Abraaj Group.


Source:
Trinidad Guardian
Monday August 5, 2013

http://www.guardian.co.tt/business/2013-08-05/republic-gains-majority-stake-ghana-bank