Banks to cannibalise savings and loans

Universal banks in the country are expected to acquire most of the savings and loans companies in the country within the next three years, as savings and loans companies (S&LC) begin to thirst for capital injection.

There are currently about 24 saving and loans companies, and over 390 micro-finance institutions.

Mr. Asare Akuffo, Managing Director of HFC Bank, speaking at the 2014 PwC's Financial Services Executive Breakfast Meeting to present the PWC's 2014 Ghana Banking Survey report, said within the next three years, he envisages the acquisition of Savings and Loans Companies by Universal banks in the country.

“Banks may acquire some of the S&LC like Fidelity has done. We expect that to happen because S&LCs need capital going forward and banks will be able to that inject capital,” Mr Akuffo said.

Fidelity Bank Ghana Limited recently agreed in principle to acquire 100 percent ownership of ProCredit Savings and Loans Company Limited as part of a strategy to leverage the latter’s strong SME presence and processes.

The transaction, which is subject to Bank of Ghana and shareholders’ approval and the completion of other closing conditions, will entail Fidelity purchasing all of the shares currently held by the two shareholders, PCH and the DOEN Foundation of the Netherlands.