By Kofi AHOVI
United Bank for Africa (UBA) is preparing the modalities for a rights issue to enable it to meet the new minimum capital requirement set by the Bank of Ghana (BoG).
The bank is planning to raise an unspecified amount from its shareholders in Ghana and its parents company in Nigeria.
The bank has up to December this year to meet the BoG’s new minimum capital requirement of GH¢60 million which was increased from GH¢7 million for universal banks in the country.
According a report by PricewaterhouseCoopers on the banking industry in Ghana, UBA currently has about GH¢20.6 million and needs about GH¢39.4 by year end to enable it to meet the new minimum capital requirement.
The right issues will see the group supporting its local subsidiary with part of the required capital, while the rest is raised by its local shareholders.
The new minimum capital requirements are to be met in stages, involving different minimum capital levels for indigenous and foreign banks, during the first stage, which has December this year as its deadline, but a common minimum capital level by the end of the second and final stage, which has the end of 2012 as its deadline.
Banks with majority foreign owned equity are required to have a minimum capital of GH¢60 million by the end of this year.
However, banks with majority Ghanaian owned equity are required to have minimum capital of GH¢25 million by the end of this year, but must have increased this to at least GH¢60 million by the end of 2012.
Ghana Commercial Bank (GCB), Agricultural Development Bank (ADB), Merchant Bank Ghana (MBG) and Barclays Bank Ghana Ltd. (BBGL), have already crossed the bridge.
The increase in the new minimum capital requirement is to further improve both the liquidity and solvency position of all universal banks to enable them to deal effectively with any future expected and unexpected shocks.
United Bank for Africa (UBA) is preparing the modalities for a rights issue to enable it to meet the new minimum capital requirement set by the Bank of Ghana (BoG).
The bank is planning to raise an unspecified amount from its shareholders in Ghana and its parents company in Nigeria.
The bank has up to December this year to meet the BoG’s new minimum capital requirement of GH¢60 million which was increased from GH¢7 million for universal banks in the country.
According a report by PricewaterhouseCoopers on the banking industry in Ghana, UBA currently has about GH¢20.6 million and needs about GH¢39.4 by year end to enable it to meet the new minimum capital requirement.
The right issues will see the group supporting its local subsidiary with part of the required capital, while the rest is raised by its local shareholders.
The new minimum capital requirements are to be met in stages, involving different minimum capital levels for indigenous and foreign banks, during the first stage, which has December this year as its deadline, but a common minimum capital level by the end of the second and final stage, which has the end of 2012 as its deadline.
Banks with majority foreign owned equity are required to have a minimum capital of GH¢60 million by the end of this year.
However, banks with majority Ghanaian owned equity are required to have minimum capital of GH¢25 million by the end of this year, but must have increased this to at least GH¢60 million by the end of 2012.
Ghana Commercial Bank (GCB), Agricultural Development Bank (ADB), Merchant Bank Ghana (MBG) and Barclays Bank Ghana Ltd. (BBGL), have already crossed the bridge.
The increase in the new minimum capital requirement is to further improve both the liquidity and solvency position of all universal banks to enable them to deal effectively with any future expected and unexpected shocks.
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