General News of Sunday, 6 January 2019
The Chief Operations Officer at the Dalex Finance, Joe Jackson, has described the recently created Consolidated Bank Ghana (CBG) by the Bank of Ghana as a ‘damaged brand’.
According to Mr. Jackson, the CBG which was formed to takeover insolvent banks in the Ghanaian banking sector will need some more years to fully function as a bank despite being officially recognized as a bank by the Central bank
According to him, the Consolidated Bank Ghana due to the circumstances that led to its formulation will struggle to attract any form of banking transactions from Ghanaians
Speaking on Citi FM and Citi TV’s news analysis program, The Big Issue, Mr. Jackson likened the current operations of the CBG to a new television station that has not began transmitting yet.
He opined on the show that, the CBG is no bank at all adding that there are no new customers for the bank.
“The Consolidated Bank is not a bank, let’s not shy away from the real issues, who wakes up in the morning and says I am going to open an account with the consolidated bank? …Who wakes up in the morning and says, I need a loan to finance my trade, so I am going to the consolidated bank? Forgive me, but we are light years away from getting them into a bank. A bank is what a bank does”
“They are not getting new deposits, they are also not booking new loans… It is like telling me, I am preparing to set up a new television station, but I have not started transmitting yet….The Consolidated Bank Ghana brand is a damaged brand.”
Consolidated Bank formed
The Bank of Ghana (BoG) in August 2017 announced the creation of the Consolidated Bank Gh. Ltd to take over five struggling banks in the country at the time.
Sovereign Bank, Royal Bank, The Beige Bank, Construction Bank and Unibank were the five financial institutions that run into liquidity challenges in what appeared to be a banking sector crisis.
Government also made ¢450m cedis available for the Consolidated Bank as starting capital and named Daniel Addo as its CEO.
The 31st December deadline for banks to meet the new ¢400m minimum capital requirement saw the Bank of Ghana also revoking the licenses of Premium Bank and Heritage Bank and approved their takeover by Consolidated Bank Ghana Limited.
Banks in Ghana reduced from 34 to 23
Ghana’s financial space will now have only 23 banks, down from the 34 that were operating in the country as of January 2017.
This follows a cleanup of the sector by the Bank of Ghana.
Many of the banks that previously operated in the country have folded up and taken over by other banks due to various new regulations introduced by the Central Bank including the GHS 400 million minimum capital requirement.
In August 2017, the Bank of Ghana (BoG) gave GCB Bank Ltd the green light to acquire two local banks UT and Capital bank due to severe impairment of their capital.
In August 2018, the Bank of Ghana consolidated five other local banks into what it calls the Consolidated Bank Ghana limited.
The bank of Ghana in a statement on January 4, 2019 following the expiration of the minimum capital requirement deadline said, all the 23 remaining banks have met the new minimum paid-up capital of GHC400 million.
“Sixteen (16) 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 (3) 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 (3) resulting banks out of these mergers have all met the new minimum capital requirement.”
“Some private pension funds in Ghana have injected fresh equity capital in five (5) 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,” the statement said.