OmniBank, the Small and Medium Enterprises (SMEs)-focused bank, is in talks with local and foreign investors to meet the Central Bank’s new GH¢400million minimum stated capital requirement.
But the increment in the bank’s stated capital will in no way affect its philosophy of supporting SMEs and youth development, but rather better position it to do more for its clients, Philip Oti-Mensah, Managing Director of the bank, has said.
“The board met and we took major decisions. One of them was to appoint a transactional advisor and to ensure that current shareholders maintain ownership or control so that our philosophy of developing SMEs and giving young people in Ghana the opportunities to develop can stay.
We are not considering only one shareholder but about four or five so that the current shareholders can maintain majority. We are having talks. It is a mixture of private equities and development finance institutions and it is generally looking good for us,” he added.
Mr. Oti-Mensah noted that the bank is likely to do more than the GH¢400million but right now “our interest is meeting the current level.”
The Central Bank, two months ago, increased the stated capital of banks from GH¢120million to GH¢400million, with a deadline of December, 2018 for all players to meet the new minimum requirement.
With the aim of strengthening the sector, the BoG is also hopeful that the increment will lead to some mergers and acquisitions in the industry and reduce the number of banks.
Most bankers who spoke to the B&FT believe that they will meet the required capital and have already started presenting their capital plans to the regulator.
With 34 banks operating in the country, 90 percent of which require extra capital to meet the new requirement, the industry could see more than GH¢5billion in fresh capital; especially if all banks seek to survive the increment without mergers or acquisitions.
Mr. Oti-Mensah explained that the investors have a common interest of pursuing retail banking business with OmniBank. “Some have digital banking platforms they want to bring to Africa. These are not investors who have invested in Africa before and they are using Ghana as a hub,” he said.
He added that the new capital will be deployed in the creation of assets and channels. “With our agenda to become a key retail bank in Ghana, this is an opportunity to invest more in channels. Very soon you can do business with your phone and these involve software that cost money.
There will be ATMs and all these things cost money. We are not only serving SMEs but corporates as well. On the personal banking side, we are deploying some of the capital into mortgages. The new product is called OmniHome, which will provide affordable housing denominated in local currency and paid over shorter periods,” he noted.