The Governor of the Bank of Ghana, Dr. Ernest Addison has hinted that 19 banks are expected to meet the minimum capital requirement by the end of this year.
This is an increase of 4 more banks from the 15 banks announced mid-year 2018.
Dr Addison made this known at the 84TH Monetary Policy Committee meeting in Accra on Monday.
As at August 2018, the Central Bank’s data showS that a total of 30 banks are operating in the industry. Of this, at least 11 banks are yet to declare their position on meeting the new minimum capital requirement with three months to the deadline.
Seven banks have reached the target with seven others undertaking various measures to recapitalize. These seven banks include; the Consolidated bank, Republic bank, Access bank, Zenith Bank, Barclays Bank, Ecobank Ghana as well as GCB Bank.
Nonetheless, two banks; Omnibank Ghana Limited and Sahel Sahara Bank (BSIC) Ghana Limited have also announced plans to merge into one strong financial entity.
The Governor assured that the banking system continues to be profitable, sound and well- capitalized.
Total assets increased by 39.7 percent to GHS 44.2 billion in July 2018. Of the total, advances constituted 45.8 percent.
Currently, the industry’s capital adequacy ratio of 19.1 percent is significantly above the prudential requirement of 10.0 percent, as banks reduced their operating expenses in response to a decline in both interest and non-interest income, Dr Addison noted.
He added that, the private sector credit growth continues to recover, although at a moderate pace as the ongoing balance sheet restructuring by the banks continues.
Private sector credit in August 2018 grew by 15.8 percent year-on-year compared with 6.5 percent a year earlier. In real terms, private sector credit expanded by 5.4 percent in August against a contraction of 5 percent over the same period last year.
The latest credit conditions survey shows a tightening in banks’ credit stance on loans to both households and enterprises as banks continue to repair their balance sheet and also build their capital base.
By Joshua W. Amlanu