23 banks escape BoG axe; GN Bank, Heritage Bank gone

Business News of Saturday, 5 January 2019

Source: dailyguidenetwork.com

2019-01-05

play videoDr. Ernest Addison, BoG Governor

Twenty-three commercial banks have met the GH¢400 million minimum capital requirement to escape the big axe of the Bank of Ghana (BoG) which has been sanitizing the country’s financial sector over the past 20 months.

So far 11 banks, which were not able to cross the finishing line, have gone underground.

Central Bank Governor Dr Ernest Addison, who announced this at a press conference in Accra yesterday, said as of 31st December, 2018, 16 banks had been able to recapitalise on their own, while the rest managed to get there through mergers, among others.

Dr Addison said that from a total of 34, the banking sector now can now boast of 23 robust and well capitalised banks to undertake big ticket transactions of any kind.

He gave the names of the 16 banks, which crossed the finishing line before the December 31st, 2018, deadline as Access Bank, Consolidated Bank, Bank of Africa, Barclays Bank, Cal Bank, Ecobank, FBN Bank, GCB Bank, GT Bank, Fidelity Bank, Republic Bank, Societe Generale, Stanbic Bank, Standard Chartered Bank, UBA and Zenith Bank.

Dr Ernest Addison said banks that have merged included First Atlantic Merchant Bank Limited/Energy Commercial Bank, OmniBank Ghana Limited/Bank Sahel Sahara Ghana, as well as First National Bank/GHL Bank Limited.

Bailout

He also mentioned that some indigenous banks would benefit from the Ghana Amalgamated Trust (GAT) initiative proposed by some pension funds in the country.

They include ADB, NIB, OmniBank/BSIC, Universal Merchant Bank and Prudential Bank.

In the case of Bank of Baroda, the governor said it was exiting due to strategic reasons.

Details

“Following the recapitalisation exercise that ended at the close of business on 31st December 2018, there are now 23 universal banks operating in Ghana. These banks have all met the new minimum paid-up capital of GH¢400 million. Sixteen banks have met the new minimum paid-up capital requirement of GH¢400 million mainly through capitalisation of income surplus and a fresh capital injection.

“The Bank of Ghana has approved three applications for mergers. Consequently, First Atlantic Merchant Bank Limited and Energy Commercial Bank have merged, Omni Bank and Bank Sahel Sahara have merged, and First National Bank and GHL Bank have merged. The three resulting banks out of these mergers have all met the new minimum capital requirement.”

He added that some private pension funds in Ghana have injected fresh equity capital in five indigenous banks through a special purpose holding company named Ghana Amalgamated Trust Limited (GAT).

“In addition to the state-owned banks (ADB, NIB) benefiting from the GAT scheme, the other beneficiary banks (the merged Omni/Bank Sahel Sahara, Universal Merchant Bank, and Prudential Bank) were selected by GAT on the basis of their solvent status and good corporate governance. More details about the GAT scheme will be provided by GAT and the Ministry of Finance.”

Recapitalisation, restructuring

“The government has notified the Bank of Ghana that it intends to restructure NIB through governance and management reforms, as well as streamline its business model to help refocus it as a bank to support industrialisation. To help ensure that these reforms succeed, the Bank of Ghana has today appointed an advisor for NIB, pursuant to section 101 (1) of the Banks and Specialized Deposit-Taking Institutions Act of 2016 (Act 930) to advise management of the bank with a view to helping improve the affairs of the bank.

“The Advisor will hold office until otherwise advised by the Bank of Ghana and will furnish the Bank of Ghana with a status report on the bank in three months and as frequently as the Bank of Ghana may require.”

GN Bank

He said GN Bank (GN) was unable to comply with the minimum capital directive by 31st December 2018.

“Consequently, GN Bank has applied for, and the Bank of Ghana has approved the grant of a savings and loans company licence.”

Licence revocation

“Pursuant to Section 123 of the Banks and Specialised-Deposit-Taking Institutions Act, 2016 (Act 930), the Bank of Ghana has revoked the banking licences of Premium Bank Limited and Heritage Bank Limited with effect from the date of this Notice and has appointed Mr. Vish Ashiagbor of PricewaterhouseCoopers as Receiver for the two banks.”

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