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Report: Ghana regulator facilitating talks between banks, investors to spur M&A

The Bank of Ghana, which in 2017 lifted the minimum capital requirement for local lenders to 400 million cedis from 120 million cedis, is facilitating discussions between banks and investors as part of efforts to drive consolidation and boost the country's banking industry, Bloomberg News reported, citing people familiar with the matter.

Foreign private equity firms and local pension funds are prepared to invest in the sector, although some banks are said to be against the prerequisite to merge and are instead trying to find other means to bolster their capital and meet the new requirement by the December-end deadline, the people said.

Heritage Bank Ltd. is one of the lenders against consolidation as it prefers a partner with a similar aim of helping grow small firms, the news agency said, citing an interview with Managing Director Patrick Fiscian. Fiscian added that the bank is in talks with a major international fund for a cash injection.

Premium Bank also plans to avoid a merger and is in advanced discussions with a Ghanaian investment fund for a cash boost, an unnamed source told Bloomberg News. A potential tie up with OmniBank has been floated by investors in talks set up by the central bank, the people said.

Willing buyers include Republic Bank (Ghana) Ltd. and Fidelity Bank Ghana Ltd., Bloomberg said, while Stanbic Bank Ghana Ltd.'s head of corporate and investment banking, Kwamina Asomaning, had said the Standard Bank Group Ltd. unit is prepared to acquire another bank, according to Joy Business.

Meanwhile, CalBank Ltd. and the local units of Ecobank Transnational Inc. and Standard Chartered PLC have said they will opt to transfer surplus funds to their capital holdings to boost cash.

Republic Bank Ghana, Access Bank PLC unit Access Bank (Ghana) PLC, Energy Bank Ghana Ltd. and Société Générale SA unit Societe Generale Ghana Ltd. plan to carry out rights issues and IPOs amounting to 1.1 billion cedis, although the market is seen as too small to raise the money given the short time frame, Bloomberg said.

Charles Adu Boahen, Ghana's deputy finance minister, said President Nana Akufo-Addo has directed a committee to come up with proposals to help local lenders, adding that the group is almost done with the report.

The central bank previously warned that there will be no extensions to the deadline, Bloomberg News noted. Bank of Ghana Governor Ernest Addison said the regulator will have more clarity on which banks will likely meet the deadline by the end of July.

As of May 21, US$1 was equivalent to 4.61 Ghanaian cedis.