Amid the claims that the Ghana Amalgamated Trust (GAT) is disrupting ownership and shareholding of local banks, the Trust has clarified that its majority stake in Prudential Bank was not a deliberate takeover but the outcome of a capital rescue effort following the country’s Domestic Debt Exchange Programme (DDEP).
The Managing Director of GAT, Abraham Tetteh, emphasizes that it is never the intention of the Trust to deliberately disrupt ownership and shareholding of banks under the GAT scheme.
In an interview with The High Street Journal, Abraham Tetteh expressed reservations about recent publications that churned out what he described as inaccuracies over the operations of the trust.
He explains that the Trust’s increased shareholding in Prudential Bank emerged after other shareholders were unable to inject fresh capital following the financial shocks triggered by the Domestic Debt Exchange Programme.
According to him, GAT’s role in the bank has always been that of a shareholder, not an entity seeking permanent control. “We are the majority shareholder,” he confirmed, but was quick to add the circumstances leading to the situation.
How GAT’s Stake Increased
The Managing Director traced the shareholding development back to 2020 when GAT made its initial investment in the bank to capitalize the local institution following the financial sector clean-up and the Bank of Ghana’s decision to increase the minimum capital requirement to GHC 400 million.
This initial capital injection through state funds acquired 47% stake as part of efforts to strengthen indigenous banks after Ghana’s banking sector reforms. At the time, the investment was intended to provide capital support and restore confidence in the banking sector.
“We did an initial investment, and at the time, we were 47%. We had 47% stake in the bank,” he explained.
However, the situation changed following the implementation of the Domestic Debt Exchange Programme in 2023, which significantly affected the balance sheets of many financial institutions.
The programme led to losses on government securities held by banks, eroding capital buffers and creating fresh capital gaps across parts of the sector.
For Prudential Bank, this meant the board had to raise additional funds to stabilise the institution. To close the gap, the bank issued a rights offer to existing shareholders, giving them the opportunity to inject additional capital in proportion to their holdings.
But according to the MD, none of the other shareholders were able to participate in the capital raising exercise. That left GAT as the only shareholder willing and able to take up the rights issue.
“The directors of the bank saw the need to issue a rights issue to the existing shareholders. None of the shareholders could participate, so GAT participated in the rights issuance. And having done so, our stake went up to 76%. Okay, so 76%, that is the stake the government has in the bank at the moment, because of the take-up of the right issue that was issued,” he explained.
He added, “If any other shareholders participated, perhaps our shareholding wouldn’t have risen to that magnitude. And so that is not a liability. We are the true owners of the establishment.”
Not a Takeover Strategy or Permanent Ownership
Abraham Tetteh emphasised that the resulting majority stake should not be interpreted as a takeover strategy.
The shareholding rose simply because GAT was the only shareholder that supported the recapitalisation. He also dismissed claims that the arrangement represents a liability or hidden obligation on the bank’s books.
Importantly, Abraham Tetteh stressed that GAT’s ownership in the bank is not intended to be permanent.
The Trust was established primarily to support and stabilise indigenous banks during periods of financial stress, not to control them indefinitely. Under the existing shareholder agreement, existing shareholders of the bank have the first right of refusal to purchase GAT’s shares when the Trust decides to divest.
This means the original owners will be given the first opportunity to buy back the shares before they are offered to other investors.
“This ownership is temporary. It’s never permanent. So when the government deems it necessary for us to exit, we’ll bow out from the bank; there is what you call the first right of refusal to the existing ownership. When we are going out, they’ll be in the known. If they want to take up our shares, they have the first right of refusal. And that will be it,” he explained.
Dividend-Based Returns
The MD further clarified that GAT does not extract any special financial benefits from the bank beyond normal shareholder returns. The Trust earns income only if the bank declares dividends.
Since its initial investment in 2020, the bank declared dividends once in 2022, when it was performing strongly.
Aside from that, GAT does not receive any additional payment except the 1% management fee, which every subscriber of the GAT scheme pays as part of the arrangement.
The Bottomline
Far from claims of taking over the bank, the MD is stressing that GAT’s intervention is aimed at safeguarding the viability and sustainability of local banks.
He maintains that the objective has always been to support the bank when needed and exit at the appropriate time.
For now, the Trust’s increased shareholding reflects a moment of financial support during a difficult period, not a shift toward permanent state ownership of Ghana’s indigenous banks.
