Most Ghanaian banks cannot establish international branches due to low asset base – GITFiC

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The weak asset base of Ghanaian banks is a major factor in their inability to penetrate internationally as other foreign banks have entered the Ghanaian market.

“Most Ghanaian-owned banks have a weak asset base compared to their counterparts in other African countries.

“The language barrier is another factor that prevents some Ghanaian investors from operating in international markets. Most of the countries surrounding Ghana are French-speaking countries hence the need for trusted people who can interpret French for Ghanaian investors when visiting French-speaking markets.

This was in a statement signed by Mr. Selasi Koffi Ackom, Managing Director of the Ghana International Trade and Finance Conference (GITFiC) and copied to the Ghana News Agency in Accra on Friday.

This was in response to a rhetorical question posed to the Trades Union Congress a few weeks ago about why there were no Ghanaian banks in other countries.

“At a press conference in Accra on Monday, July 18, 2022, the General Secretary of the Ghana Trades Union Congress, Dr. Yaw Baah asked the audience why Ghanaian banks do not operate internationally.

According to GITFiC, most of the commercial banking space was occupied by foreign banks, mainly from Nigeria and South Africa, among other countries.

“There are 23 commercial banks registered in Ghana as of 2021. Of the 23 banks, nine of them are Ghanaian institutions, while the remaining 14 are foreign banks. Four of Ghana’s nine banks are public banks. Cal Bank also has its major shareholder to be Social Security and National Insurance Trust (SSNIT) is also a public institution.

“This implies that the only Ghanaian private banks are Universal Merchant Bank, Prudential Bank Limited, OmniBSIC Bank Ghana Limited and Fidelity Bank.

The GGITFIC stated that the main objective of companies is to make profits for its stakeholders.

“Growing market share is one of the main tools companies use to increase their profit. The banking industry is a highly competitive industry, where a bank’s ability to grow and maintain its market share is critical to the survival of the bank as well as the achievement of the bank’s profit objectives.

“The Ghanaian economy is one of the largest economies in Africa. The Ghanaian economy is currently the 8th largest economy in Africa, behind Nigeria, Egypt, South Africa, Algeria, Morocco, Kenya and Ethiopia.

“Nigeria has a nominal GDP of $480.482 billion in 2021, followed by Egypt with $396.328 billion. Ghana has a GDP of $75.487 billion as of 2021. Companies are expected to countries with a higher economic position participate in international trade by establishing operations in other countries.

The statement said that prior to the 2017 recapitalization and subsequent cleaning up of the banking sector in Ghana, more than 10 Ghanaian private banks were operating in Ghana, but due to the GH¢400 million recapitalization request in 2017, some of them between them have been merged, taken over. by the government, with some closures.

The statement said Ecobank Ghana had the highest asset base of GH¢15.8 billion, followed by Ghana Commercial Bank with an asset base of GH¢15.4 billion.

He said that none of the Ghanaian private banks had an asset base of more than GH¢10 billion in Ghana.

“By comparing the assets of banks owned by Ghanaians and those owned by foreigners, Ghanaian banks will not be able to compete internationally.”

Mr. Ackom said the nature of an investor is also another factor that affects an organization’s ability to penetrate international markets.

“The calm and peaceful nature of Ghanaians increases the tendency of Ghanaian investors to be more risk averse compared to some of their Nigerian and South African partners. risk averse nature of Ghanaian investors.

The CEO of GITFiC said that although Ghanaian banks need to expand into international markets, their inability to raise GH¢400 million during the recapitalization a few years ago is proof that they are still struggling to reach the break-even point.

The Ghana International Trade and Finance Conference (GITFiC) is a private sector initiative that works with the private and government sectors in the sub-region and Africa as a whole to drive the Free Trade Agreement (CFTA), Africa’s broader development agenda, (as defined in the AU’s Agenda 2063) global trade issues in general, and other commercial, financial, trade and finance and logistics agreements .

Source: GNA

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