Adu Anane Antwi, Director-General, Securities and Exchange Commission
Adu Anane Antwi,

In the wake of banks considering various options of how to raise its minimum capital as required by the regulator of the industry, the public is told not to expect much mergers as a desired option.

According to some experts of the financial industry, it will really be difficult to record some numbers of mergers among the banks due to the lack of trust and believe nature of the Ghanaians.

The immediate former Director General of the Securities and Exchange Commission (SEC), Dr Adu Anane-Antwi at a roundtable organized by the Institute of Financial and Economic Journalist (IFEJ) emphasized that some bank mergers may suffer setbacks due to lack of trust.

He explains that, the lack of trust among businesses and companies in Ghana is a major challenge to the industry.

But, surprisingly the management of HFC Bank has noted that, the two banks approached HFC after the Bank of Ghana’s announcement to find out whether they can come together as single bank.

However, the management remained silent on announcing the said two banks.

“We have started preliminary discussions with two banks that have approached us since the announcement was made and if there is progress, then you will see some kind of merger or an acquisition take place. But remember we will not just want to merge or acquire other banks but we will consider whether we have some common grounds especially when it comes to culture which will impact on our way of doing business together seamlessly,” the HFC Managing Director, Anthony Jordan have said.

Mr. Jordan confirmed that, there have been conversations within the banking industry around mergers and acquisitions among the banks; and HFC is open to offers from other banks.

HFC was one of the three banks that applied for the purchase of UT and Capital banks.

Mr Jordan affirmed that, even without any merger and acquisition or any kind of inward investments, HFC will meet the new capital.

“We intend to meet this new threshold long before the deadline in December 2018. There are strategic reasons why we will meet the deadline. Based on the discussions I have had with our majority shareholder the Republic Bank, we have decided to reinject the additional capital to meet the requirement of GH¢400 million just after our next Annual General Meeting which is set to take place in April 2018”, he said.

Notwithstanding, he downplayed calls by some other stakeholders within the financial industry for the central bank to take a second look at the increase which they deemed to be too high.

Mr. Jordan stated that: “I will not say the amount set by the regulator is too much. One has to look at it from the context of the problems and the losses some banks have run into in times past. We must look at capital requirement as a buffer, which is able to help the banks to stay in business if there are shocks within the industry.

The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison this week announced that the central bank has received some proposals from banks pushing for mergers and takeovers, following the announcement of the new capital requirement.

The Bank of Ghana increased the capital requirement of banks from 120 million cedis to 400 million cedis in September 2017.

The increment was applauded by some financial observers as a good development that may force mergers in the banking industry to reduce the growing number of banks in the country.

Touching on the issue, Dr. Anane-Antwi said the lack of corporate governance may push some banks to conceal some critical information that may affect the mergers.

“We have always talked about mergers and acquisitions even straight from table top businesses. I discussed this with a friend who said ‘I can assure you mergers and acquisition will never be prominent in Ghana because we don’t trust each other’. We have lived for sixty years but still no trust so everybody wants to deal with their individual businesses. What belongs to me is not the same as what belongs to us” he said.

He pointed out that mergers among local businesses have suffered setbacks due to breach of trust and dishonesty. “As soon as you come together, within three weeks there is a problem. So capital reason is supposed to help people merge”.

-Adnan Adams Mohammed

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