Home | Goldstreet Business
Friday, January 22, 2021
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result

Ghana’s impending mismatched banks

December 12, 2018
in Uncategorized
0
Share on FacebookShare on Twitter

With just a couple of weeks to the Bank of Ghana’s deadline for the country’s universal banks to meet the new GHc400 million minimum capital requirement, several banks are now in belated, feverish efforts to consummate mergers aimed towards fulfilling that requirement.

This simply shows that the poor corporate governance quality that has afflicted much of Ghana’s banking industry has been accompanied by equally poor strategic management. From the moment the BoG announced the 233% increase in minimum capital requirement, it was clear to all stakeholders that consolidation in the form of mergers and acquisitions would be required and indeed the central bank never hid its desire for this to happen.

RELATED POSTS

TUC Considers Establishing Labour Banks

Agro-processing, Tourism key to reducing unemployment in Ghana – study

But rather than getting down to seek suitable partners, the smaller banks, primarily indigenously owned, went about lobbying government for an extension of the deadline instead, in order to enable them use retained earnings over the next five years, to meet the new minimum capital requirement.

The simple truth of this was that the owners of the smaller banks wanted to retain the irrespective equity stakes and consequent authority so that they could continue to misuse it for their own benefit.

The result of their ill-advised stance is that some of them are now involved in a race against time to consummate mergers before the deadline that will still not be enough to enable them meet the new capital requirement.

Even if they do manage to complete their mergers in time – or more likely convince the BoG to give them more time in order to do so – and are also able to raise the additional equity capital they would need, the resultant merged entities will be unwieldy banks, comprised of disparate parts. Here, the situation facing Consolidated Bank, the result of a merger between five very dissimilar banks,is very instructive. Combining banks with very different visions, target markets, processes and procedures, as well as product and service delivery systems is a most difficult proposition, one which is unlikely to produce optimal results.

This is why usually, banks looking to merge, deliberately seek compatible partners in these regards in order to achieve vertical integration; or seek partners that can complement each other to diversify their markets and achieve horizontal integration.

The mergers currently being rushed through are not aimed a any of these strategies. Rather they are simply the result of desperation by their owners to maintain some holdover an entity with a much-coveted banking license.

This is not what the BoG really wanted when it put the industry on the path to consolidation.

We are disappointed with the attitudes shown by the owners of some of Ghana’s banks and their current travails are entirely of their own making. If they had started looking for suitable partners right from the beginning, they would not have been in the frenzies they now find themselves in right now; after all they had time but wasted it going in obviously wrong directions.

For example,Energy Bank has entered merger negotiations with just days to the deadline, and armed with barely a fifth of the capital needed to stay in business, because it went after an Initial Public Offer for shares which never stood a realistic chance of succeeding. And when this was diplomatically pointed out, the bank’s executives rather went after the analysts who were pointing out the challenges,threatening them with legal action for daring to suggest that the IPO might not work out.

We hope such banks have learnt their lessons, even as we hope they will get through their current challenges successfully and become more strategically astute – and realistic – going forward.

60

SHARES
facebook Share on Facebook
Twitter Tweet
Follow Follow us
custom Share
custom Share
custom Share
custom Share
custom Share
ShareTweetShare

Related Posts

TUC Considers Establishing Labour Banks

TUC Considers Establishing Labour Banks

January 22, 2021
Agro-processing, Tourism key to reducing unemployment in Ghana – study

Agro-processing, Tourism key to reducing unemployment in Ghana – study

January 21, 2021
REPO trading goes online

Cedi will be fairly stable in 2021 – BoG

January 21, 2021
Calls for stimulus packages for local businesses involved in AfCFTA – GNCCI

Calls for stimulus packages for local businesses involved in AfCFTA – GNCCI

January 21, 2021
Construction Chamber urges Akufo-Addo to Sign Real Estate Authority Bill into law

Construction Chamber urges Akufo-Addo to Sign Real Estate Authority Bill into law

January 21, 2021
Next Post

Agribusiness Chamber to hold awards next week

Andani North DCE commission projects, donate to schools

Archives

<
January 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

TUC Considers Establishing Labour Banks

TUC Considers Establishing Labour Banks

January 22, 2021
Agro-processing, Tourism key to reducing unemployment in Ghana – study

Agro-processing, Tourism key to reducing unemployment in Ghana – study

January 21, 2021

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.