Bernard Osei Tutu
Investors are investing with foreign-owned banks operating in Ghana to protect their investments due to the recent collapse of two indigenous banks, analysts have pointed out.
Owing to the development, indigenous players in the investment banking space have appealed to the Central Bank to strengthen its regulatory role to protect Ghana’s financial system.
Bernard Osei Tutu, Chief Executive Officer (CEO) of Dusk Capital, who was speaking in an interview on Friday in Accra after the launch of Dusk Capital, an indigenous investment institution, said the recent development has reportedly compelled investors to invest in Barclays, Stanchart and Stanbic, adding that the issues must be addressed quickly to save the image of local institutions.
Appeal to regulators
“The regulating bodies should stand up and do more than they are doing, they should make conscious efforts and the key word is conscious effort to protect indigenous firms,” he said, adding, “I will tell you that things are getting so bad that investors now do not trust indigenous firms. You speak to clients and they will tell you that they would rather invest their monies in the foreign banks such as Barclays, Stanchart and Stanbic.”
“We should make a conscious effort to make sure that we grow our indigenous banks, and it is up to the regulatory bodies to protect us, to help us shape us and be a guide on us so we can stand on our feet”.
T-bill rates drop
He commended government for sticking to its guns to bring Treasury Bill rates down.
“This is really good. What it does for us is that it gives us a lot of opportunity to also compete within the market, because government is not competing with us within that same space investment.
“Because government is obviously the biggest borrower within the market, if government rate is not exciting enough, then that is where we the private sector can begin to play. So I think and I will say that they are living by the saying that they want the private sector to develop.”
Mr Tutu revealed that over the last six months, a lot of people are bringing their money to us to manage for them because T-bills are no longer incentive for them so we can give them a small benchmark higher than what government can give to them.”
“So these are exciting times and I want this to even go down. Analysts have predicted that the T-bill rates should reduce to a single digit. As you saw in 2001 so that people will bring their money so that we can invest for them. That is the only way we can also thrive as a private sector.”
“It’s rather unfortunate that over here in Ghana there are no investment banks that drive the economy. If you go to America, we have the JP Morgans, Goldman Sachs and the rest. These are top investment banks that rob shoulders and do everything to positively impact the economy.
“In Ghana we mention investment banks and we can only talk of Databank, who has been around for 25 years. That is our space. Our space is within the capital market space. Unfortunately, the banks that are supposed to do retail banking are supposed to do money market. They have no business in the capital market space. The capital market space belongs to investment banks who are duly licensed by SEC while the banks that are supposed to do commercial banking are under the control of the Bank of Ghana (BoG).
“But unfortunately due to the lack of education, we all have fallen under the same umbrella and people can’t even differentiate between a commercial bank and an investment bank.”
He therefore called for more formal education on investment from the primary school level.
By Samuel Boadi