Ghana's Banks Need More Cash Than Its Markets Can Provide
Ghana’s banks face a daunting race to meet new capital rules by the end of next year.
Lenders will need to raise 9 billion cedis ($2 billion), which the local equity and debt market is too small to supply, according to George Bodo, the head of banking research at Ecobank Capital Ltd. in Nairobi, Kenya. While it may trigger mergers and acquisitions among the West African nation’s 34 banks, many will struggle to meet the requirement or complete deals on time, he said.
Accumulating that kind of capital will top the 1.4 billion cedis that has been raised on the Ghana Stock Exchange through initial public offerings, share and rights offers and debt sales since 2012, according to data from the Accra-based bourse. The central bank in August approved a deal that resulted in Ghana Commercial Bank Ltd. taking over the deposits and some assets of two smaller lenders that failed to meet capital requirements.