Tie-Up Plan for Three Ghanaian Lenders Is Said to Break Down

(Bloomberg) -- Three Ghanaian banks are close to abandoning talks for a merger as the two smaller parties contend that their operational models are incompatible with the bigger counterpart, according to two people familiar with the matter.

Premium Bank Ltd. and BSIC Ghana Ltd. are no longer keen for a tie-up with GN Bank Ltd. and will pursue talks with other parties, said the people, who asked not to be identified because they’re not authorized to speak about the matter. The three lenders held merger talks to help them meet the regulator’s new minimum capital requirement of 400 million cedis ($83 million) that comes into effect in December, Bank of Ghana Governor Ernest Addison said July 23.

GN Bank has a branch network of 298 and held 121.7 million cedis in capital at the end of 2016, according to its website. Premium Bank has five branches and had capital of 120 million cedis at the end of last year, while BSIC’s holdings were 71.6 million cedis with 17 branches, according to the lenders’ websites.

Retail Banking

While BSIC and Premium focus on trade financing and companies, GN’s services include retail banking for individuals.

Premium Bank Managing Director Kwasi Tumi declined to comment. BSIC MD Mensan Adeboke Affambi was not available to take questions when visited at his office. GN Bank’s general manager for centralized operations, Allen Quaye, declined to comment when contacted by phone.

The push for smaller lenders in West Africa’s second-biggest economy to increase their capital comes as the regulator seeks to strengthen the industry and encourage lending. While lenders from the local unit of Societe Generale SA to Agricultural Development Bank Ltd. are preparing for share sales to meet the new threshold, no merger deal has been finalized since the central bank announced the increased requirement in September last year.

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