Subsequently, he has asked customers and investors of the bank to continue doing business with the bank.

Dr Adetuntan gave an assurance at the opening of the head office of FBN Bank Ghana in Accra at the weekend.

The Bank of Ghana has directed banks to raise their minimum capital from the GH¢120 million presently to GH¢400 million by the close of 2018.

The call from the central bank is expected to see some consolidations in a sector where there are 33 banks and counting.

“We are the largest bank in Nigeria and, therefore, money to recapitalise our own should not be a problem,” he said.

Dr Adetuntan said the issue about recapitalisation has been witnessed in Nigeria some years back and, therefore, FBN Bank was aware of the stakes but was ready for the task.

According to him, the bank was in Ghana for the long haul; hence, the relocation into its head office building and assured customers and other investors of better times ahead.

Banks recapitalisation

The Head of Banking Supervision at the Bank of Ghana, Mr Raymond Amanfu, in a speech read on his behalf, said: “The importance of a well-capitalised banking sector cannot be overemphasised and regulators intermittently review the levels of minimum capital requirements of banks to protect depositors’ funds”.

Mr Amanfu said under the Banks and Specialised Deposit-Taking Institutions Act (Act 930) the discretionary powers of the bank of Ghana to grant single obligor limit had been extinguished.

“It is in the light of this and other factors that the Bank of Ghana has increased the minimum capital of banks to GH¢400 million; banks have up to December 2018 to comply with the new capital requirement and would be required to submit a capitalisation plan to the Bank of Ghana,” he added.

Corporate governance

Meanwhile, he said the Bank of Ghana had identified the non-adherence to good corporate governance as one of the major causes of the high level of loan impairment within the banking sector.

“We all agree that bad loans erode a bank’s capital; however, let me add that poor corporate governance practices are just as bad if not worse,” Mr Amanfu said.
He said: “The high impaired assets of the banking industry are a function of weak infrastructures and weak in identifying probable defaulters.”

To that end, Mr Amanfu indicated that the Bank of Ghana in its quest to strengthen the risk management practices of banks had sponsored institutions such as the Credit Reference Systems and Collateral Registry to help in profiling borrowers.

“The review of the Borrowers and Lenders Act seeks to address recognition of perfected collateral foreclosure issues, while Credit reporting Act is being reviewed to include, among other things, providing data on all borrowers (current dispensation require only negative information,” he said.

Mr Amanfu said other structural reforms being embarked on by the government such as the digital addressing system for building a centralised national database and the national Identification System project would be invariably improve on the non-performing loans (NPL) situation within the banking sector.