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<\/div>\n<\/div>\nUniBank has secured over GH\u00a2600million of fresh capital injection to position itself as one of the earliest banks to meet the central bank\u2019s increased stated capital requirement, a source close to the deal has told B&FT.<\/p>\n
In a move that is expected to repose some much-needed confidence in local banks, the fresh capital \u2013 coming from a financial consortium led by Belstar Capital, a turnkey project finance and implementation institution \u2013 according to the source, will see the bank\u2019s capital, including income surplus, reach almost a GH\u00a21billion; positioning it as one of the most dominant players in the market.<\/p>\n
Though uniBank is substantially capitalised with a paid-up capital of GH\u00a2310million and an income surplus of some GH\u00a252million, leaving just about GH\u00a238million to meet the BoG\u2019s threshold, the source noted that uniBank wants to position itself as the industry\u2019s premier local player \u2013 ready to help economic development.<\/p>\n
\u201cThough uniBank is safer than other banks, I believe the bank wants to show other local banks that they can attract good capital \u2013 especially local capital \u2013 and still remain local and support economic growth, just like the foreign banks are doing,\u201d the source added.<\/p>\n
Since the central bank increased the stated capital of banks from GH\u00a2120million to GH\u00a2400million, all but one of the local banks are in need of fresh capital injection \u2013 with some needing as much as GH\u00a2250million to stay in business or face universal banking licence withdrawals.<\/p>\n
This situation led some analysts to opine that the banking sector, already dominated by foreign players, will be totally controlled by the multinationals, continental and sub-regional institutions.<\/p>\n
Ghana\u2019s banking landscape, according to central bank data, indicates that local banks control only 21 percent of the industry\u2019s total assets \u2013 which was not the case two decades ago, when the industry was dominated by state banks.<\/p>\n
B&FT\u2019s analysis of current paid-up capital of banks and income surpluses of all 34 universal banks operating in the country shows that apart from GCB \u2013 which has a total paid-up capital of GH\u00a2703million \u2013 local banks with a capital shortfall will have to find hundreds of millions to recapitalise.<\/p>\n
Even though the local banks are currently scouting for domestic and foreign investors so as to stay in business, most of them are confident they will meet the BoG\u2019s requirement \u2013 and that could lead to a heavy injection of about GH\u00a25billion in fresh capital into the economy.<\/p>\n
Finance Minister Ken Ofori-Atta has already noted that the economy \u201cneeds about five strong local banks\u201d supporting the foreign ones to develop the economy.<\/p>\n
Despite the worries of local players, the plurality of banks has over the last decade led to more innovation to the benefit of consumers. There are more electronic-based products on the market now than ever before; cost of credit, though very high, is more competitive; and accessibility to physical bank branches across the country has improved.<\/p>\n
The present universal banks have been preparing for the next half-decade since 2014. Indeed, PwC\u2019s 2014 Ghana Banking Survey noted that: \u201cMany of the [banking] executives have already begun a switch from a \u2018watch and see\u2019 mode to a \u2018position and grow\u2019 mode in anticipation of changes to the banking sector in the coming five years\u201d.<\/p>\n
This clearly shows that local banks have a deep understanding of the market and what it holds in the future, despite their limited financial muscle and uniBank\u2019s move, the source added. It goes a long way to bolster the confidence of local banks that they can be leaders of economic development in the next decade.<\/p>\n
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Source: B&FT<\/p>\n
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