Speaking at a press conference Tuesday July 21, 2009, the governor of the central bank, Dr. Paul Acquah, announced that three banks have been able to raise the amount to meet the requirement of the bank’s regulations. Banks that fail to meet the requirement can not do business in Ghana.
The three banks are Barclays Bank, GT Bank and Ghana Commercial Bank. Barclays Bank and GT Bank are foreign banks and Ghana Commercial Bank is a Ghanaian bank.
According to the Bank of Ghana’s new regulations, banks owned by Ghanaians are required to recapitalize to the tune of GH¢25 million by 2010 and raise it to GH¢60 million by 2012 and banks with foreign owners operating in Ghana are required to raise GH¢60 million by 2010.
Commenting on the performance of the banking sector, he said, deposit money banks’ (DMBs) rates broadly firmed-up in the second quarter of 2009. Average base rate quotations of the banks were revised upward by 160 basic points (bps) in the second quarter in the range 25.75 percent – 32.0 percent compared with the earlier 170 bps increase in the first quarter of last year. Average lending rates were similarly revised upward by 150bps in the second quarter to 32.75 percent within the range 25.75 – 40.0 percent.
Dr. Acquah noted that the expansion of the total asset portfolio of the banking system seen in the first quarter of the year continued into the first two months of the second quarter.
He said, total assets of the banking industry for the twelve month period to May 2009 grew by 36.0 percent to GH¢11,479.0 billion, compared with a growth of 37.1 percent for the same period in 2008. However, an increased proportion was in the form of investment in Treasury bills.
At the same time, he said, deposits growth which was 36.4 percent, compared with 40.7 percent for the same period in 2008, was the main source of funds for expanding the asset portfolio of banks.
According to Dr. Acquah, external borrowings by banks, as a source of funding remain less than 5 percent of total bank funding requirements.
The banking industry’s total external credit lines constituted less than 10 percent of total trade and no significant disruption has been observed in these credit arrangements, he said.
Adding, a stress test of the solvency of the banking sector shows that only a recall of significant proportion (in excess of 50 percent) of external borrowings will impact on the risk adjusted capital of the banking industry.
Capital adequacy ratio for the industry was 14.5 percent, higher than the prudential level of 10 percent for the industry, he said.
By Emmanuel K. Dogbevi