Bayport to take over CFC Savings and Loans
Bayport Financial Services is to take over its sister company, CFC Savings and Loans Company Limited, in a merger deal that is expected to help reduce operational costs and bring synergy to the business.
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The merger will result in a bigger and better entity that will operate as a savings and loans company but under the same brand name as Bayport.
Already, the management of Bayport has sent requests for approval to regulatory institutions, including the Bank of Ghana (BoG), the Securities and Exchange Commission (SEC) and its note trustees, the Fidelity Bank Ghana Limited.
The approval is expected to be completed by end of the month to pave the way for full integration to begin in January 2017, the Managing Director (MD) of Bayport, Mr Kofi Adu-Mensah, said in Accra.
"We are currently doing almost the same thing and selling the same products. Our majority shareholders are the same, we do virtually the same thing and so, I see no reason why we should operate in isolation,” Mr Adu, himself a shareholder, said at the Ghana Stock Exchange's Facts behind the Figures programme on December 12.
“Why have two managing directors, two branch managers at say Atebubu or even other branches? It's all cost that can be reduced.”
“We think there are synergies that we should be able to take advantage of,” he added.
Form of merger
Mr Adu-Mensah explained that unlike other mergers, the marriage of Bayport and CFC would not involve the exchange of money but a share swap among shareholders.
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“It means we are going to give some shares of Bayport to shareholders of CFC,” he said.
He explained that the Social Security and National Insurance Trust (SSNIT) which is the only shareholder of CFC that does not have shares in Bayport, will be given some shares in the enhanced Bayport that will equate its current holding.
“The entity is still going to be Bayport and our obligation to customers and stakeholders will still hold. In fact, we will be in a better position to even serve you better,” the MD added.
Branch network
Bayport, a South African finance institution, is a non-bank financial institution (NBFIs) with speciality in the disbursement of micro and payroll loans.
It has been in existence since 2003 and has extended its presence to the 10 regions of the country.
In September this year, loans disbursed totalled GH¢270.5 million, while assets rose to GH¢354.9 million.
About 90 per cent of the loans came from the payroll portfolio, the Chief Finance Officer of Bayport, Mr Gabby Quartey, said at the function.
CFC, on the other hand, holds a savings and loans licence that allows it to extend credit to customers in its two branches nationwide.
Mr Adu-Mensah observed that a successful merger of the two institutions would thus help increase the company’s branch network to be able to serve customers better.