Most of the 13 banks that recorded post Domestic Debt Exchange (DDE) capital deficits have now met or exceeded their recapitalisation requirements at the end of 2024.
This is on the back of strong profitability and Ghana Financial Stability Fund (GFSF) support—and are on course to restore Capital Adequacy Ratio (CAR) of 13.0% without reliefs by end-2025.
According to the Country Report by the International Monetary Fund, despite shareholders and/or GFSF capital injections, a few banks (including one state-owned) are materially behind on their recapitalisation schedule.
This is due to slow progress against shareholder capital commitments, higher Non-Performing Loans, and/or delayed booking of credit impairments and required provisioning identified under Bank of Ghana’s 2023 asset quality assessments.
“These banks are subject to intensified BoG monitoring and corrective measures to accelerate recapitalization plans to reach CAR of 13% (end-March 2025) by end-2025”, it alluded.
It pointed out that a Parliamentary approval and implementation of the World Bank funded segment of the GFSF could help some banks achieve CAR targets by end-2025.
This is provided that they secure capital injections sufficient to reach capital levels eligible for access.
BoG Intensifies Monitoring of 5 Private and State-Owned Banks
Meanwhile, the Bank of Ghana has intensified the monitoring of and remedial and/or corrective measures against five private and state-owned banks, which have not complied with the recapitalisation requirements as of end-December 2024.
These banks have fallen behind on their recapitalization schedule due to a mix of unmet capital commitments, increased NPLs, and incomplete booking of credit impairments identified under the BoG’s 2023 asset quality assessments.
In addition, they are implementing updated recapitalization plans accepted by BoG and addressing previous weaknesses and/or more recent performance slippages, towards meeting the end-2025 timeline for full compliance.
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