United Bank Of Africa
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8th July, 2009
UBA, Zenith To Raise Funds To Meet BoG Directive
Two Nigerian banks, United Bank for Africa (UBA), and Zenith Bank, have instituted processes to raise funds locally through rights issue and capitalisation of profits to meet the minimum capitalisation of GH¢60 million ($42 million) demanded by the Bank of Ghana (BoG) for December, this year.
UBA, which was Standard Trust Bank, became the first Nigerian bank to open a subsidiary in Ghana in January 2005, plans to begin rights issue to existing shareholders, a move the managing director, Gabriel Edgal, said will enable the bank to shore up the needed balance.
As part of the planned fund mobilisation strategy, the headquarters in Lagos will support the Ghanaian subsidiary with part of the remaining capital, while the rest will be raised by its local shareholders.
Zenith Bank on the other hand, hopes to capitalise its profits for the year.
The bank capital base currently stands at GH¢43 million.
Andy Ojei, managing director of the bank, says capitalising the bank’s profit will raise the overall equity to GH¢50 million by September.
“We expect that our parent company will bring in the remaining balance,” explains Ojei, who maintains that the deadline poses no threat to the bank which only last month emerged Ghana’s Best Bank at the Ghana Banking Awards.
The BoG last year announced new minimum capital requirements of GH¢60 million for banks operating in the country.
Foreign banks were given up to December, this year, to meet it, while Ghanaian-owned banks were given a longer time period to meet the new capital requirement.
Under the directive, banks with local majority share ownership will have to attain a capitalisation of at least GH¢25 million by the end of 2010 and GH¢60 million by 2012.
The central bank in issuing the new directive stated that the new capital requirement constitutes part of its strategy to expand the financial sector and support Ghana’s drive for accelerated growth to achieve middle-income status.
As part of the process of liberalisation, the BoG introduced the universal banking licence in the first quarter of 2003.
The concept of universal licence is to allow banks to undertake commercial development, investment or merchant banking without the need for separate licences.
UBA, which was Standard Trust Bank, became the first Nigerian bank to open a subsidiary in Ghana in January 2005, plans to begin rights issue to existing shareholders, a move the managing director, Gabriel Edgal, said will enable the bank to shore up the needed balance.
As part of the planned fund mobilisation strategy, the headquarters in Lagos will support the Ghanaian subsidiary with part of the remaining capital, while the rest will be raised by its local shareholders.
Zenith Bank on the other hand, hopes to capitalise its profits for the year.
The bank capital base currently stands at GH¢43 million.
Andy Ojei, managing director of the bank, says capitalising the bank’s profit will raise the overall equity to GH¢50 million by September.
“We expect that our parent company will bring in the remaining balance,” explains Ojei, who maintains that the deadline poses no threat to the bank which only last month emerged Ghana’s Best Bank at the Ghana Banking Awards.
The BoG last year announced new minimum capital requirements of GH¢60 million for banks operating in the country.
Foreign banks were given up to December, this year, to meet it, while Ghanaian-owned banks were given a longer time period to meet the new capital requirement.
Under the directive, banks with local majority share ownership will have to attain a capitalisation of at least GH¢25 million by the end of 2010 and GH¢60 million by 2012.
The central bank in issuing the new directive stated that the new capital requirement constitutes part of its strategy to expand the financial sector and support Ghana’s drive for accelerated growth to achieve middle-income status.
As part of the process of liberalisation, the BoG introduced the universal banking licence in the first quarter of 2003.
The concept of universal licence is to allow banks to undertake commercial development, investment or merchant banking without the need for separate licences.
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