Energy Bank and First Atlantic Bank seek to join forces ahead of BoG deadline

The central bank continues to meet struggling banks finding it tough to raise the minimum GHc400 million stated capital by December 31 as to how they were raising the funds.

The Energy Bank and the First Atlantic Bank are in talks to merge to beat the deadline so as not to lose their banking license but their combined capital will still need about GHc170 million from a third party investor to meet the GHc400 million mark. The parties have official notified the central bank of their intentions and barring a no objection notice from the regulator can proceed to become one entity.

Energy Commercial Bank last October launched its Initial Public Offer to raise GHc340 million in shares from the Ghanaian investing public at GHc1.30p per share.

However the bank failed to raise the minimum amount required for its Initial Public Offer (IPO).

Banking consultant, Nana Otuo Acheampong however warned that struggling banks need to avoid mergers which can bring friction as mergers and acquisitions take time. He however held that if the Bank of Ghana has evidence that the merger process has been triggered with good progress made before the deadline, a window could be given the parties to meet the requirements as a revocation of license has many ramifications on families and the economy.

The Bank of Ghana fearing a collapse of Ghana’s banking sector instituted an investigation into their books. Based on that report, a minimum of GHc400 million stated capital was set for all the banks to meet depicting good financial health.

Twenty out of the thirty existing universal banks in Ghana have met the GHc400 million minimum capital requirement ahead of the December 31, 2018 deadline according to Second Deputy Governor; Elsie Awadzi.

Banks who fail to meet the new capital requirement will be downgraded to Savings & Loans or Microfinance institutions.

By: Michael Eli Dokosi/