Workers of the state-owned National Investment Bank (NIB) Limited, have in an open letter appealed to the government not to liquidate the bank, saying “the current board, management team and the entire staff can turn around the bank and bring it back to previous glorious days”.
They want the “Government to recapitalize the bank and not to entertain any form of liquidation” explaining that “a chunk of non-performing loans totaling over GHS2.1billion granted to companies and individuals to execute government of Ghana projects. These companies and individuals have executed the projects, raised Interim Payment Certificates, and are yet to be paid by the government”.
The workers, who place their current number at 900, fear losing their jobs in the liquidation, said “Our earnest plea comes on the backdrop of recent news, information, and intelligence gathered suggesting a possible liquidation of National Investment Bank (NIB) Limited”.
According to them, “the Bank has undergone management, institutional and financial restructuring, which has strengthened the organization. It now has 48 Branches and 3 Agencies nationwide and has tens of thousands of customers and continues to enjoy an increase in deposits. Its unique customer base spans from public and civil institutions, private companies, small to medium enterprises to individual customers. These customers are very loyal and in return enjoy excellent customer service from the bank”.
They further revealed that “internal management staffing restructuring has been successful. The staff strength saw reduction from 1700 in 2021 to a little over 900 in July 2023. There is still the edge for further downsizing to ensure efficiency and increase savings”.
“The internal challenges include Bank of Ghana embargo on granting of loans for the past six (6) years practically depriving the bank huge interest income and technically out of trade and business.
“Secondly, a chunk of non-performing loans totaling over GHS2.1billion granted to companies and individuals to execute government of Ghana projects. These companies and individuals have executed the projects, raised Interim Payment Certificates, and are yet to be paid by the government.
“Thirdly, the Bank’s investments in Government of Ghana bonds of GHS857,000.00 held up and affected by Domestic Debt Exchange Program (DDEP) is also not helping matters”.
However, “amid all these challenges, the Bank has performed excellently well by increasing its deposit position from GHS3.2 billion in August 2022 to GHS5.1 billion in August 2023. Deposit increases month on month and the target of GHS7.0billion year ending December 2023 is highly achievable”.
Below is the letter from the NIB workers kicking against the liquidation dated; September 13, 2023
THE LIQUIDATION OF NATIONAL INVESTMENT BANK LIMITED AND MATTERS ARISING
We humbly plead that you use your good office to intervene for the Government to recapitalize the bank and not to entertain any form of liquidation. Our earnest plea comes on the backdrop of recent news, information, and intelligence gathered suggesting a possible liquidation of National Investment Bank (NIB) Limited. The current board, management team, and the entire staff can turn around the bank and bring it back to previous glorious days.
National Investment Bank (NIB) was set up in 1963 by an act of Parliament (ACT163). It was incorporated as an autonomous joint state-private institution on March 22, 1963, it was established primarily to promote and strengthen rapid industrialization in all sectors of the economy.
NIB, therefore, is the first development bank in Ghana. NIB set up over 100 joint enterprises, including the defunct regional development corporations. Other existing companies, including Nestle Ghana Limited, Novotel (now Accra City Hotel), Kabel Metal (now Nexans Kabelmetal), Aluworks, etc, etc.
The Bank has undergone management, institutional, and financial restructuring, which has strengthened the organization. It now has 48 Branches and 3 Agencies nationwide and has tens of thousands of customers and continues to enjoy an increase in deposits. Its unique customer base spans from public and civil institutions, private companies, small to medium enterprises to individual customers. These customers are very loyal and in return enjoy excellent customer service from the bank.
Nevertheless, the recent global economic changes coupled with unique but solvable internal challenges have created capital gap for the bank.
The internal challenges include Bank of Ghana’s embargo on granting of loans for the past six (6) years practically depriving the bank of huge interest income and technically out of trade and business.
Secondly, a chunk of non-performing loans totaling over GHS2.1 billion granted to companies and individuals to execute government of Ghana projects. These companies and individuals have executed the projects, raised Interim Payment Certificates, and are yet to be paid by the government.
Thirdly, the Bank’s investments in Government of Ghana bonds of GHS857,000.00 held up and affected by the Domestic Debt Exchange Program (DDEP) is also not helping matters.
Amid all these challenges, the Bank has performed excellently well by increasing its deposit position from GHS3.2 billion in August 2022 to GHS5.1 billion in August 2023. Deposit increases month on month and the target of a billion year ending December 2023 is highly achievable.
The goodwill from our loyal customers has been amazing as the bank opens over 2,000 new accounts every month. The bank’s nationwide customer cash collection service is second to none.
Internal management staffing restructuring has been successful. The staff strength saw a reduction from 1700 in 2021 to a little over 900 in July 2023. There is still the edge for further downsizing to ensure efficiency and increase savings.
Also, the management workable structures put in place by the current management team have been very effective and responsible for the sustenance and continued existence of the bank despite BoG embargo on granting of loans and other delimitating factors. Notable among the structures are a strong Risk Department, independent Internal Audit, solid Compliance team, effective Operations Division, Executive Committee (EXCOM), Management Committee (MANCOM), solid Business Development, and robust ICT divisions.
The bank currently requires a capital injection of GHS2.2 billion to operate efficiently. Though the amount is significant it is possible to be secured by the majority shareholder or other minority shareholders if pursued.
It is our fervent plea that the majority shareholder (Government):
· Should recapitalize the bank by injecting GHS2,2billion being the capital deficit.
· Should implore the Bank of Ghana (BOG) to lift the embargo on granting of loans immediately to enable the bank trade.
· Should honour its obligation regarding Interim Payment Certificate raised by customers of the bank in connection with work done for the state.
· Should explore other prudent alternatives other than liquidation.
· Should have faith and allow the current Board and Management team to turn the bank around.
It is our humble plea and desired will that you use your esteemed office to intervene and save the National Investment Bank and all stakeholders especially the staff whose livelihood greatly depends on the very existence of the Bank.
This is from all staff.
Source: theheraldghana.com
