No extension to recapitalization deadline - Bank of Ghana

Thu, 19 Apr 2018 Source: thefinderonline.com

The Bank of Ghana (BoG) says it will not extend the deadline for the recapitalization of the banking industry despite calls by some local banks for President Nana Akufo-Addo to intervene in the process.

Banks have up till December 31, 2018 to increase their stated capital to GHc400 million, a decision that has compelled the local banks to plead with the President of the Republic of Ghana, triggering the formation of a committee to look into the indigenous banks concerns.

According to Osei Gyasi, Head of Banking Supervision, the recapitalization programme still holds and therefore the Central Bank will go ahead with its earlier plans.

“The President is the father of the nation there is no doubt about that. The banks can go to the President for a hearing but as far as the Central Bank is concerned the directive have not changed, the December 31, 2018 deadline has not changed”, he told Citi Breakfast show.

He, however, encouraged all the banks to work towards its plan of meeting the capital requirement by the end of December this year.

“As far as the Central Bank is concerned the deadline has not changed and we are encouraging them to work towards the plan that they have submitted to us.”

Mr. Osei Gyasi said he believes the banks will have made serious efforts to shore up their capital to GHc400 million come December 31, 2018.

Meanwhile, based on their shareholders’ funds, about 12 banks are likely to meet the minimum capital requirement of GHc400 million by the Bank of Ghana far ahead of the deadline since they have more than enough capital in their balance sheet.

The banks are Ecobank, GCB, Barclays, Stanbic and Standard Chartered Bank, all tier one banks. They have shareholder funds of GHc902 million, GHc1.05 billion, GHc979 million, GHc889 million and GHc927 million respectively.

Shareholders' funds is the balance sheet value of the shareholders' interest in a company. The items within the shareholders' funds are stated capital, capital surplus, income surplus, reserves and retained profit.

Other banks that could meet the new requirement ahead of time are Fidelity (GHc500 million), Zenith Bank (GHc702 million), NIB (GHc791 million) and CAL (GHc622 million). The rest are ADB (GHc507 million), Access (GHc467 million) and UBA (GHc498 million).

Among the 12 banks that are likely to pass the minimum capital requirement test way ahead of the December 2018 requirement, only four are indigenous banks.

Source: thefinderonline.com

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