The operations of Ghana Commercial Bank (GCB), is gradually grinding to a halt as a result of some massive resignations that has hit the bank in recent times.
The Herald, can report the bank is losing a lot of its experienced hands to most of its competitors and some emerging banks in the country.
GCB, the only bank that has a training school for the in -house training of its staff at Nungua, a suburb of Accra, is gradually losing its experience hands after
spending huge sums in training them.
The Herald is reliably informed that majority of the top notch hands trained by the bank, are leaving the bank in protest of the management style of the Managing Director (MD), Mr Simon Dornoo.
The attrition rate at Ghana Commercial Bank (GCB), since the current Managing Director took over the running of the state owned bank, is as if the bank was folding up like one of those Nigerian banks in the later part of the year 2000.
The Herald ,can say the exodus of experienced and well qualified hands to other banks and financial institutions, will fast become a determinant for the survival of GCB in the coming years.
The management style of Simon Dornoo, The Herald learnt is analogous and autocratic, thereby forcing a lot of the people, who have hitherto helped to write the success story of the once biggest bank in Ghana to leave.
The Herald, can report workers are silently up in arms against the MD-led management, as well as the governing National Democratic Congress (NDC).
Majority of staff are teething with anger, and pointing accusing fingers at the government for not doing anything about their predicaments, even though petitions upon petitions, have been forwarded to the seat of government.
The workers are contesting that If the President, John Dramani Mahama, is desirous of retaining power, he must do something about the situation.
Whilst, the sterling performance of some MDs at other state banks, have engineered their banks to wanting to list on the Ghana Stock Exchange, the situation is different at GCB.
The philosophy of lets create together and share together to motivate the workers, is missing in the books of Mr Dornoo The Herald can say .
Interestingly, these are attracting the brightest bankers in the industry as GCB is staggering to maintain its experienced hands.
Ghana Commercial Bank, The Herald learnt has now become a breeding ground for competitive banks, and no single bank in Ghana, has not benefited from the benevolence of Simon Dornoo-led management.
The Herald cannot mention names of individuals who have left and to which bank, because this paper do not have their permission to do so.
Last January, Moody’s Investors Service, downgraded GCB Bank Limited’s global local-currency long-term deposit ratings to B3 from B2, its foreign-currency deposit ratings to C1 from B3, and adjusted downward its baseline credit assessment (BCA) to b3 from b2. The outlook on the bank’s deposit ratings remains negative.
The rating action follows the weakening of Ghana’s credit profile, as captured by Moody’s downgrade of the country’s government bond ratings to B3 from B2, with a negative outlook, on 19 March 2015 (please see “Moody’s downgrades Ghana’s sovereign rating to B3; outlook negative”).
In turn, GCB Bank’s ratings were downgraded as a consequence of (1) the significant correlation between the bank’s creditworthiness and the sovereign’s own credit profile through the bank’s sizeable holdings of government-related assets; and (2) Ghana’s weakening operating environment, which will likely exert pressure on the bank’s asset quality metrics.
Today’s downgrade of GCB Bank’s ratings reflects the extensive interconnectedness between its balance sheet and sovereign credit risk, owing to the banks’ high exposures to the government of Ghana (B3 negative). While on a declining trend, GCB Bank’s direct and indirect exposures to the sovereign — through government securities, public-sector loans and central bank balances — remain high. Together, these exposures accounted for over 50 percent of the bank’s total assets, or 3x its shareholder equity as of September 2014, according to Moody’s estimates.
The rating action also reflects Ghana’s weakening operating environment, which will likely exert pressure on the bank’s financial metrics, asset quality in particular. For example, borrowers’ loan-repayment capacity could come under pressure from Ghana’s (1) slowing economic growth rates (Moody’s estimates real GDP to have slowed to 4.2 percent in 2014 and will further decelerate to 3.5% in 2015); (2) increasing in inflation rates (17% by end 2014, 15.3% as of end 2013); (3) high interest rates; and (4) delays in government payments to domestic corporates. As of September 2014, the bank reported non-performing loans at 9.4 percent of gross loans.