Accra, June 26, GNA - President John Agyekum Kufuor on Monday described the high presence of banks from West Africa establishing in Ghana as a clear manifestation of the country's belief in using banking as a tool for Sub-Regional integration.

This was contained in a speech Mr Kwadwo Baah-Wiredu, Finance Minister, read on behalf of President Kufuor at the official opening and inauguration of the head office building of Guaranty Trust Bank Ghana limited in Accra.

President Kufuor said the development was a key to facilitating business across the Sub-Region and to achieving the goals and objective of the New Partnership for Africa's Development (NEPAD). It was also important for the various Economic Community of west African States (ECOWAS) countries to work towards achieving the single currency status in the Sub-Region.

GT Bank is a subsidiary of Guaranty Trust Bank PLC, the fifth largest bank in Nigeria with an asset base well in excess of two billion dollars.

GT Bank PLC holds 78 per cent shares while Alhaji Yusif Ibrahim, Board Chairman, holds the remaining 22 per cent. President Kufuor said the Government's vision of promoting the private sector as the engine of growth could not be fulfilled without the effective functioning of financial intermediaries such as Banks, Finance Houses, Insurance Institutions and the other non-bank financial institutions.

He said he was, however, not happy about the low level of overall financial intermediation in the country compared to other Sub-Saharan African Countries, saying that the development further constrained financial and private sector growth. President Kufuor said evidence available suggested that Ghanaian banks had relatively higher interest margins and overhead costs and their pre-tax returns on assets and equity were among the highest in the seb-Region.

"Indeed the degree of competition in pricing by banks in Ghana still remains relatively weak despite the entry of a number of new banks recently. Lending rates remain high despite a consistent decline in the prime rate. The spread between borrowing rates and lending rates are still quite wide," President Kufuor said.

He called on the banks to find ways to address the structural problem and enhance the intermediation potential for growth. He urged banks adopt innovative means to reach those outside the banking system through the design of appropriate financial products targeted at typical households to attract them.

President Kufuor asked banks to focus attention on financing the small-scale and medium-scale enterprises, adding that the passage of the Credit Reporting Bill and the National Identification Administration Bill would help to develop the credit infrastructure and thereby enhance financing to the SME sector.

Dr Paul Acquah, Governor of the Bank of Ghana, said the deepening of macroeconomic stability and the rising Gross Domestic Product (GDP) growth over the past few years meant that banks must position themselves through innovation, efficiency and cost-containment to be successful. He said the Financial Service Sector had engendered healthy competition among banks by admitting new banks while encouraging existing banks to beef up their capital and adopt universal banking. Dr Acquah called for a shift in the banking culture from profit seeking predominantly on the back of investments in Treasury Bills and over pricing of loans to a few select customers and rather move to innovation, cost effective, competitive pricing of risks and increased lending to the private sector.

Alhaji Yusif Ibrahim, Board Chairman, said the inauguration of GT Ghana Head Office was a major step towards the Bank consolidating itself on the Ghanaian financial scene. 26 June 06