Five out of the seven Nigerian banks operating in the country have already met the Bank of Ghana’s (BoG) new minimum capital requirement of GH¢ 400 million for universal banks.
They are five are Access Bank, FBN Bank, GT Bank, Zenith Bank and United Bank of Africa.
However, the Graphic Business is reliably informed that the remaining two, First Atlantic Bank and Energy Bank, are almost through with their announced merger talks to consolidate their operations.
The merger, when successful, would help bring the banks closer to GH¢400 million mark. Both sides have already agreed to find a third source to plug the deficit.
The successful banks used various strategies, including private placements, transfers from surplus income and injection of fresh capital.
Strong Nigerian Banks
The recapitalization exercise by the BoG is not new to Nigerian banks, because their parent companies have gone through a similar processes in the past.
In 2005, the Central Bank of Nigeria (CBN) undertook a similar recapitalization exercise that saw the minimum capital for banks in Nigeria raised to N25 Billion (US$192.2 million1) from N1 Billion (US$7.7 million1) for existing banks and N2 billion (US$15.4 million) for new entrants.
On completion of the exercise, the total number of banks in Nigeria reduced from 89 to 25.
This resulted in the transformation of the Nigerian banking industry into one with stronger banks that had the capacity to compete at a regional level, beyond Nigeria.
This marked the influx of Nigerian banks into the Ghanaian market due to their strong capital position.
It is, therefore, expected that a successful completion of Ghana’s banks recapitalization exercise would build bigger banks to do bit ticket deals in the country.