Ghanaian banks missing among big players

The recent African Bankers Award held on the sidelines of the annual meetings of the African Development Bank (AfDB) in Marrakech, Morocco in May this year did not see any Ghanaian bank wining any of the awards at stake.

The award ceremony which was organised by the African Banker is the only pan-African magazine dedicated to banking in the continent and it is held annually to recognise banks that have make impact on the continent or within the sub region. In all 21 various awards were at stake and none of the awards went to any Ghanaian bank.

Guarantee Trust Bank of Nigeria scooped the prize for African Bank of the Year while the Best Bank in West Africa went to FirstBank Nigeria. Investment Bank of the Year went to Rand Merchant Bank, South Africa.

The Award for Innovation in Banking went to Ecobank Transnational, Togo and the Socially Responsible Bank of the Year was taken by Nedbank, South Africa. When it comes to ranking of banks in Africa, Ghanaian banks are not near the top echelon of commercial banks in the continent.

African banking can be roughly split into two systems – Sub-Sahara Africa and North Africa. The top 150 listing is dominated by the big four South African financial giants: Standard Bank, ABSA; Nedbank and FirstRand Group.

The new generations of banks are coming from Nigeria and by assets they are FirstBank, Zenith Bank, UBA, Access Bank, Guaranty Trust Bank.

Standard Bank Group has total assets of US$184.518 billion as at the close of business on December 2011; ABSA has total assets of US$97.241 billion while FirstRand has an assets of US$94.144 billion. Nedbank has total assets of US$80.110 billion.

FirstBank of Nigeria has assets of US$17.383 billion. This is followed by Zenith Bank with an assets to GH¢11.901 billion. UBA US$11.901, Access Bank US$10.014 and Guaranty Bank US$9.874 billion.

In the last Monetary Policy Committee report of the Bank of Ghana, total assets of the banking industry increased to GH¢29.6 billion about (US$14.8 billion) at the end of April 2013, compared with GH¢23.2 billion in April 2012.

According to the report, this was driven mainly by advances which accounted for 42.5 per cent of the total assets.

The asset growth was funded by deposits which recorded an annual growth of 22.4 per cent to GH¢20.7 billion at the end of April 2013.

Ghana Commercial Bank was listed as the 121st bank on the continent with total assets of US$1.502 billion while Barclays Bank of Ghana took the 133rd position with total assets of US$1.163 billion.

These figures clearly tell you that Ghanaian banks are not members of the big players when it comes to banking on the continent despite the recapitalisation programme. It is against this background that most banks in the country cannot fund long-term projects.

And until the local banks take the commanding heights of the economy, nothing much could be achieved in terms of growth and development of the economy.

For Ghanaian banks to make any impact on the economy they must take a lead role in the oil and gas industry, the cocoa and the mining sectors which control the bulk of the economy.

PWC in its banking survey for 2012 posed these questions to the CEOs of the banks as to what in their view would be the main drivers of change in the banking industry over the next five years and why?

Historically, banking in Ghana has been profitable; where do you think the next wave of high incomes and profits will be coming from?

On what basis will banks compete over the next five years? What do you see as the greatest hindrance to growth over the next five years? And after capitalisation, what is the immediate next step?