Happening now: Five banks merged into one major bank

Happening now: Five banks merged into one major bank

- The Bank of Ghana has merged five local banks into one

- The new bank is called the Consolidated Bank of Ghana Ltd

The Bank of Ghana has brought five local banks all under one management following controversies over their financial standing.

The new bank will be termed the Consolidated Bank and will be headed by Daniel Addo as the new CEO.

In an emergency press conference, the governor of the bank of Ghana, Ernest Addison, revealed that Sovereign Bank's license was obtained under false pretenses and that the bank is insolvent (bankrupt).

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Also, Beige and Construction Banks obtained licenses under false pretenses using fictitious and nonexistent capital.

Bank of Ghana is consolidating assets of above banks including Unibank and Royal Bank to become the consolidated bank.

So far, clients should be advised that deposits are safe. All staff of affected banks will become staff of the Consolidated Bank.

Sources close to YEN.com.gh say that the merger was based on a directive from the Bank of Ghana which wants all banks to pay a minimum capital requirement of 400 million cedis.

Already, some major local banks (UT bank, Capital Bank and Construction Bank) have all gone down following their inability to meet this new requirement.

This development comes as no surprise especially when the association of local banks has petitioned the president to take a closer look into developments regarding the new minimum capital requirement.

The rise of the amount from GH¢120 million to GH¢400 million is believed to have been agreed after a closed-door meeting between the Governor of BoG, Dr. Ernest Addison, and some leading executives of the various banks.

The last time the BoG directed banks to recapitalize was in 2012 when the minimum capital was raised from GH¢60 million to the current GH¢120 million, representing a 100% increase in the amount.

The recapitalization of banks has become necessary following the recorded improvements in the Ghana economy, with experts describing the move as timely.

The development, though, is expected to see the consolidation of some banks that may not be able to raise the minimum capital.

In 2012 after the BoG's directive to have all banks recapitalized, the likes of the Trust and Intercontinental Banks were consolidated into Ecobank and Access Bank respectively.

READ ALSO: Nana Addo not in control of Ghana - Top NDC official cries

So far, some foreign banks have announced their readiness to pay way ahead of the December deadline while smaller banks are asking for more time to meet the requirements.

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Source: Yen.com.gh

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