Recapitalization deadline: Some banks struggling to raise 400m capital

Business News of Wednesday, 2 January 2019

Source: citibusinessnews.com

2019-01-02

Governor of the BoG, Dr. Ernest Addison

The Bank of Ghana as part of measures to clean up the banking sector increased the capital requirement of banks from 120 million cedis to 400 million cedis.

Commercial banks were given up to December 31st to meet the new capital requirement. So far, the Governor of the Bank of Ghana, Dr. Ernest Addison has revealed that 22 banks out of the 30 banks have so far met the new requirement.

By this, eight banks are still expected to announce their position as the clock ticks. It is not clear the next move that may be taken, but reports suggest some may opt for mergers.

Already, Indian state owned bank, Bank of Baroda has commenced moves with the central bank to exit the Ghanaian banking sector.

Government has also indicated plans to help other state owned banks with pension funds to meet the requirement.

Meanwhile, Banking Consultant Nana Otuo Acheampong is hopeful there will be a few surprise mergers in the coming days.

He maintained that the move is one of the viable options available to banks struggling to meet the capital requirement.

“The Bank of Ghana has confirmed some 22 banks have met. So really we are talking about eight banks left. So of the eight banks, we know some are also merging, so we might have only about three or four banks that we are not too sure of,” he observed.

Nana Otuo Acheampong however stressed that the Bank of Ghana will make the announcement after January 01, 2018.

“The Bank of Ghana I don’t think will be making an announcement tomorrow. It will be at the close of business today [31st December 2018], so they have to give everybody the chance until the last bell that will be at 5:00pm. So if anything, they will make an announcement after the New Year, 2nd or 3rd January as to the banks that have completed, and then what’s happening to those who have not being able to meet”.

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