banks

Three banks still ‘undercapitalised’ -BoG Governor

The Governor of the Bank of Ghana (BoG), Dr Ernest K. Y. Addison, has revealed that three banks are still below the 10% capital adequacy ratio.

Speaking at the Ghana Investment Summit, he said since the BoG’s directive to banks to recapitalise, all the affected banks had moved beyond the range of significantly under-capitalised, except the three.

“We expect that by the deadline in September this year they would have met the capital adequacy ratio of 10 per cent,” he said.

UT, Capital Banks

Explaining the circumstance that led to license revocation of the two Ghanaian-owned banks, Dr Addison said earlier this year, the BoG conducted an asset quality review which showed that non-performing loans in the banking system were significantly high.

He said about nine banks were not meeting the minimum capital adequacy ratio requirement, for which reason the BoG asked them to recapitalise under the new Banking Act.

He said banks were allowed 180 days to restore the level of their capital and that was exactly “what the BoG directed the affected banks to do”.

“We revoked the licences of the two banks because they were insolvent and they did not have the 180 days’ allowance to solve their insolvency, which was allowed for only banks that were significantly under-capitalised,” he stated.