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Expert cautions on Ghanaian banks’ mergers



Expert cautions on Ghanaian banks’ mergers

As banks in Ghana mull various options of how to raise their minimum capital as required by the regulator of the industry, the former Director General of the Ghana Securities and Exchange Commission (SEC), Dr Adu Anane-Antwi, has said that the public should not expect many lenders to choose mergers as a desired option.

According to agency reports, he said it would be difficult to record some numbers of mergers among the banks due to the lack of trust among Ghanaians. He explained that the lack of trust among businesses and companies in Ghana is a major challenge to the industry.

The Governor of the Ghanaian Central Bank- Bank of Ghana (BoG)- Dr. Ernest Addison, last week announced that the regulator has received some proposals from banks pushing for mergers and takeovers, following the announcement of the new capital requirement. The Bank of Ghana increased the capital requirement of banks from 120 million cedis to 400 million cedis in September 2017.

The increment was applauded by some financial observers as a good development that may force mergers in the banking industry to reduce the growing number of banks in the country. Commenting on the issue, Dr. Anane-Antwi said the lack of corporate governance may push some banks to conceal some critical information that may affect the mergers.

He said: “We have always talked about mergers and acquisitions even straight from table top businesses. I discussed this with a friend who said, ‘I can assure you mergers and acquisition will never be prominent in Ghana because we don’t trust each other’. We have lived for 60 years but still no trust so everybody wants to deal with their individual businesses.

What belongs to me is not the same as what belongs to us.” He pointed out that mergers among local businesses have suffered setbacks due to breach of trust and dishonesty. “As soon as you come together, within three weeks there is a problem. So capital reason is supposed to help people merge,” he said. It will be recalled that lack of trust among bank owners was a major issue during the bank consolidation programme launched by a former Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, 2004\2005.

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