Ghanaian banks in a late rush to merge to meet new Minimum Capital Requirement

Even though the announcement on the MCR was made about 15 months ago, all three ongoing merger talks started in the third quarter of this year.


The Bank of Ghana (BoG) set a deadline of December 31, 2018, for all banks in the country to meet its recapitalisation requirement of at least GHc400 million or forfeit their operating licenses.

This means that the banks have barely two weeks to meet this requirement or stop operations.

However, in a bid for their licenses not to be revoked, most banks that are unable to meet the requirement are in merger talks with other banks.

There are currently three merger negotiations ongoing. However, it is still uncertain whether the intricacies involved in merging such large financial institutions can be completed within the couple of weeks left.


It is worthy to note that even though the announcement on the MCR was made about 15 months ago, all three ongoing merger talks started in the third quarter of this year.

An example is the latest one merger talks between First Atlantic Bank and Energy Commercial Bank which was decided on just last week.

The other two – one involving Omni Bank and BSIC Bank, the other three-way proposal, involving Premium Bank, Heritage Bank, and GN Bank – started negotiations in the third quarter of this year.

By this, it makes it unlikely for the banks to merge because the deadline is a few days away.

Even if the merger should happen none of the banks can produce a consolidated entity that can fulfill the new minimum capital requirement without further new capital injections either from the existing shareholders of the merging banks or altogether new investors.


As of September 30, 2018, Omni Bank only had GHc97.368million in eligible capital while BSIC had 97.466 million. A merger between the two at that time would only have produced a merged bank with GHc194.867 million in core capital, which is less than half of the requisite minimum.

The proposed merger between First Atlantic Bank and Energy Bank is also inadequate. News reports indicate that First Atlantic Bank is taking over Energy Bank, due to the former’s, failure to achieve even the acceptable minimum subscription of its GHc340 million Initial Public Offer of shares

This means if the negotiation is completed, Energy Bank only has about GHc55.05 million to bring to the table, and First Atlantic Bank will contribute some GHc211.34 million. But they would have about GHc266.39 million when combined although both banks are making profits which would add a little to their war chest.

The other proposed merger involving GN Bank, Premium Bank, and Heritage Bank is also a challenging one.

The figures of how much GN Bank and Heritage bank has is not readily available. But Premium Bank as at mid-2018 was less than GHc100 million in eligible capital. This is indicative that even the three combined would not be able to meet the requisite minimum.


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