GN Bank targets GH¢600m minimum capital through private placement, merger

BY: Victor Kwawukume

The President of the GN Bank, Dr Papa Kwesi Nduom, says the bank is working to raise a minimum capital of GH¢600 million above the Bank of Ghana’s (BoG) requirement of GH¢400 million.

Raising the capital, he said, had been a time-consuming and stressful exercise on the part of Ghanaian-owned banks.

At a press conference in Accra last Thursday, Dr Nduom said the GN Bank had submitted a road map on meeting the minimum capital requirement of the BoG for review and that if approved, the bank would exceed the minimum capital requirement.

The options for meeting the minimum capital requirement include a private placement and mergers with other local banks.

Read also: Beige, Construction, Sovereign banks got licences under false pretenses - BoG

“The GN Bank is holding talks on merging with other banks. It is important to stress the fact that the right to approve paid-up capital contributions and mergers belong exclusively to the Bank of Ghana,” Dr Nduom stressed.

So, he added, that the GN Bank and its would-be partners had initiated discussions with BoG officials with the hope that they would grant approval for their capital and merger plans very soon.

He said the BoG had pointed out challenges that the bank needed to overcome and that “we are working round the clock to resolve them.”

Ghana News Headlines

For latest news in Ghana, visit Graphic Online news headlines page Ghana news page

Dr Nduom also debunked media reports of an earlier merger deal, saying discussions had been in progress towards that end when one of the banks involved prematurely announced a merger even without the approval of the BoG.

Read also: Why you should bank with GN Bank - Nduom explains

Effects of banking crisis

Dr Nduom said it was unfortunate that recent events in the banking sector had not helped as they had tended to decrease confidence in Ghanaian-owned banks.

“So while the BoG’s action was meant to strengthen the small banks, if care is not taken, it will rather weaken them,” he observed.

Dr Nduom encouraged Ghanaians, including businesses, especially pension fund managers, to use the services of Ghanaian-owned banks.

“If Ghana is going to see accelerated development, it needs local banks. Indeed, it is local banks that cater to the needs of the rural economy,” he posited.