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Business News of Sunday, 6 May 2018

Source: Starrfmonline.com

Capital Requirement: Banks seeking merger from us – Cal Bank

The Managing Director of Cal Bank, Frank Adu, has disclosed that due to the bank’s strong financial position, it has been approached by other banks for assistance as the deadline for the implementation of the new minimum capital requirement nears.

Mr. Adu’s revelations come in the wake of reports that the Bank of Ghana (BoG) is preparing to issue a set of guidelines to facilitate the merging and acquisitions of banks in the country which cannot meet the new minimum capital requirement of GH¢400million.

“Off-the-cuff there have been some conversation…and that was only to address the point of a shareholder as to whether we were going to be taken over by somebody else on the situation of our inability to meet the [minimum capital requirement],” he stated.

“And the assurance I am giving is that we are going to meet that minimum and we are in a much stronger position than many other banks to the extent that some are even talking to us…to see if we can assist in terms of merger,” he added.

Cal Bank is some GH¢50 million shy from meeting the GH¢400 million recapitalization amount.

The central bank last year raised the minimum capital requirement to GH¢400 million, equivalent to about US$100 million and commercial banks in the country have up to December 2018 to raise the amount, which represents a 333.3 per cent increase from the current minimum capital of GH¢120 million.

Banks were last recapitalized in 2012, when the BoG asked them to raise their stated capital from GH¢60 million at the time to the current GH¢120 million. That round of recapitalization led to the consolidation of three banks, The Trust Bank (into Ecobank), Intercontinental Bank (into Access Bank) and Amalgamated Bank (into Bank of Africa).

That round of recapitalization led to the consolidation of three banks, The Trust Bank (into Ecobank), Intercontinental Bank (into Access Bank) and Amalgamated Bank (into Bank of Africa).