Some banks in the country are contemplating merging with other banks over the increase in the new minimum capital requirement by the Central Bank.
According to the Managing Director of The Royal Bank, Osei Asafo-Adjei, the bank will be ready to merge with another should the BoG increase the minimum capital rate.
Currently, the capital requirement for banks in the country stands at 120 million cedis.
Some financial analysts have expressed doubts over possible mergers and acquisitions with the proposed minimum capital requirement of about 260 million cedis.
But the MD of The Royal Bank, Mr. Asafo-Adjei tells Citi Business News though a decision on merging will be determined by shareholders, the outfit will opt for it should that be the best option.
“What I will say is that when the time comes for the bank to recapitalize, we will be ready. As to whether the bank is going to merge or what form of capital will enable us to achieve the target that decision will have to be taken by the shareholders. But I am sure it is something that they are thinking about.” he said.
He was speaking at the launch of The Royal Bank’s Tudu Branch in Accra.
The opening brings to a total of 26 branches within 5 years of the Bank’s operation.
Capital market to grow
Meanwhile some analysts are anticipating growth in the capital market as banks which would opt out of mergers would be compelled to resort to the market to meet the revised regulatory capital requirement.
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By: Jessica Ayorkor Aryee/citibusinessnews.com/Ghana