December 9, 2022

Fifteen out of the 32 banks are now in line to recapitalise to GH¢400 million by December this year.

The fate of the remaining 17 is still unknown, barely six months to the end of the deadline for banks to recapitalise as per the directives of the central bank.

The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, said at the July Monetary Policy Committee (MPC) news conference in Accra on July 23, that data available to the central bank showed that the country could have at least 15 banks by December this year should things remain as they were.

“The data that I have shows that we have six banks that have met the minimum requirement; we have four banks that are most likely to meet and five banks that are likely to meet.

“So straightaway, you can say that 15 banks are nearly there. For me, that says that at the very least, we will have 15 banks by the end of the year,” he said.

On the state of the remaining banks, Dr Addison said: “They are at various stages of capitalisation and we are confident that most of them will work at meeting that requirement”.

“The option to merge obviously simplifies it for everybody,” he told journalists.

State banks

Although the Governor did not list the banks, a source told the GRAPHIC BUSINESS that the 15 banks ready to recapitalise were exclusive of the Agricultural Development Bank (ADB) and the National Investment Bank (NIB).

It is also exclusive of the GN, Premium and Sahel Sahara banks, which are on the verge of concluding merger talks aimed at consolidating into one.

Given that the ADB and NIB are state-owned, the source said “they have virtually met the requirement”.

“These are government banks and there is no way the government will allow them to fail,” the source, who is familiar with the status of banks’ recapitalisation, stated in confidence.

As a result, it said the BoG was confident that 18 banks were capable of recapitalising by December although it continued to study the recapitalisation proposals of the rest.

Likely takeovers

Two analysts, Dr Richmond Atuahene and Mr Michael Cobblah of C-NERGY, told the newspaper in separate interviews that evidence abounded that not all the banks would be able to raise the required amounts of capital by December this year.

“Some will struggle to meet it and will have no choice than to merge or allow themselves to be absorbed or acquired by other stronger banks,” Mr Cobblah said.

Dr Atuahene, who specialises in corporate governance issues in the banking sector, explained that although some of the banks would consider mergers, their liquidity status meant that consolidations would not achieve the desired results.

Source: Graphic online

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