About eight banks will resort to the capital market, or at worst undertake private placement, to raise funds to meet the expected new capital requirement for all banks in Ghana, Business Finder has learnt.
The banks include local giant Fidelity which has not hidden its intention of listing on the Ghana Stock Exchange (GSE) to allow Ghanaians to become part-owners of its business and Nigerian-owned FBN which has plans on floating shares on the Accra bourse after operating in Ghana for some period.
Also, ADB’s public offer which was suspended earlier this year is still pending as the bank has not cancelled entirely its intention of listing on the stock market.
Instructively, already listed banks on the GSE such as CAL and UT Bank might also be forced to raise additional capital through Rights Issue on the GSE.
This week, Access Bank Ghana launched its Initial Public Offer (IPO) to raise GH¢104 million to expand its operations in Ghana. The move has increased the number of listed local banks on the GSE to eight.
According to a statement issued by the bank, Access Bank Ghana through the IPO intends to offload some 19 per cent of its stake to Ghanaian investors.
However, this paper understands that the move is to shore up the bank’s capital in order to meet the BoG’s new minimum capital requirement for universal banks even before the central bank announces the exact amount.
Some analysts believe the new minimum capital requirement could be as much as GH¢200 million from the current GH¢60 million and industry watchers are predicting mergers among some banks in their bid to meet the requirement. Already new entrants are required to have a minimum of GH¢120 million.
The central bank increased the minimum capital requirement for banks from GH¢7 million to GH¢60 million in 2008. All the universal banks in Ghana then met that new capital requirement in 2011.
Again in 2012, the regulator increased the new capital requirement to GH¢120 million from GH¢60 million. However, existing banks, who were in pole position to meet it then, were spared but new entrants were expected to have the new minimum.
The Ghanaian banking industry has since then seen new entrants including Capital Bank (formerly First Capital Plus Savings and Loans), Sovereign Bank, and Premium Bank (formerly Citi Savings and Loans).
Many believe that the increase in the minimum capital requirement for banks will enable them fund big ticket transactions and make them more stable.
The International Monetary Fund in its assessment of the Ghanaian banking industry vis-à-vis bank’s high exposure to non-performing loans, interest risks and liquidity constraints recommended for a further strengthening of the industry to prevent any catastrophe.
Presently, there are 32 registered banks in Ghana. 30 are presently operational with Heritage Bank and Omni Bank expected to launch their full banking business soon.
Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.
