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[Music] I'd like to say that the theme for the occasion accessing the African common market through Ghana technology digitization and industrialization couldn't have been appropriate at this time when the current government since assuming office has championed the digitalization of the Ghanaian economy to ease the way of doing business in Ghana it is interesting to note that the banking industry in Ghana has completely crossed over in technology bringing the dilemma of staying in line or staying online today banks in Ghana have deployed a varied array of electronic banking products such as ATMs online banking platforms POS s ecards mobile banking mobile apps to make banking easy and convenient for their customers also in collaboration with telcos and fintechs banks in Ghana are conveniently serving their customers through mobile money and business to business and business to customer solutions my expectation is that in the next couple of years Indiana banking will be driven by analytics and improved data visualization which will be used to predict customer lifestyle and suggest tailor-made banking solutions I now turn my attention to my topic for discussion today the current reforms in the banking sector in Ghana with your permission my presentation will touch briefly on early and current reforms in the sector in Ghana its impact on commercial banks and finally I apprise you with a perspective from GCB the business of banking started in the venn Gold Coast with the aim of providing financial service to the British empty prices and the colonial in 1896 the Bank of the British West Africa which became standard chartered in 1985 open its first branch in a crop the success of the Bank attracted other foreign banks to begin operations in the venn Gold Coast the Colonial Bank for instance State for instance started its operations in 1918 and later merged with anglo-egyptian Bank the National Bank of South Africa and Barclays Bank and became known as Barclays Bank the Bank of the British West Africa and Barclays Bank were the only banks operating on the Gold Coast during the period 1920 to 1950 the Ghana commercial bank was established in 1953 as a first indigenous bank to reduce the control of the banking sector by the two ex-patriots banks immediately after the independence in 1957 the Bank of Ghana was established to take control over the management of the country's currency by 1974 many states owned banks and development financial institutions had also been set up to enhance the financial sector by providing services ignored by the commercial banks examples included the National Investment Bank Agricultural Development Bank Bank for housing and construction Merchants Bank and the Social Security Bank the deifies raised financed through deposits mobilisation government support and foreign loans and were involved in providing commercial and development banking services their forms experienced in the financial sector and the enactment of the banking law in 1989 en bici law two to five saw the operation of a number of locally incorporated banks including the Brady NBL the Trust Bank Carl Merchants Bank Elida metropolitan bank and echo bank there was too much government control in the financial sector after independence banks that were set up between the 1960s and the 1970s where either wholly or majority owned by the public sector in 1992 however government began to privatize some of the state-owned banks and the liberalization of the financial sector led to the entry of a number of foreign banks into the banking industry as well as an increase in the number of domestic banks the liberalisation of the financial sector under the fence act also brought about improved savings and Hounds deposit mobilization financial evening and competition in the banking industry however lending rates were high with wider spread between deposits and banking and lending rates the introduction of the new banking act in 2004 also led to the elimination of the secondary reserves and adjustments in the minimum capital the minimum capital was initially increased to 60 million Ghana Cedis in 2008 and then into 2013 it was increased to 120 million Ghana cities the new Act also saw the introduction of the us-rok banking license which allowed banks to provide various forms of banking services having outlined the above brief of the previous reforms and its outcome on commercial banking let me now focus on the execution of the Justin that reforms which started in 2017 and what has transpired in the commercial banking space and the perspective from GCB prior to the current reforms the financial system was under considerable state of distress with banks that were not meeting the capital adequacy requirement and others whose capital was eroded with high non-performing loans some of these banks were insolvent and illiquid others were solvent but illiquid this state of affairs was largely as a result of poor corporate corporate governance false financial reporting and insider dealings the Bank of Ghana Hitler - provided liquidity support to these failing banks without addressing the underlying problems that led today liquidity and insolvency of these institutions in short the financial system had reached a tipping point and the Bank of Ghana could not have assumed business as usual therefore they embarked on a comprehensive reform agenda with the objective of cleaning up the sector and strengthening the regulatory and supervisory framework for a more resilient banking sector as part of the implementation of the reforms the following were some of the directives and regulatory guidelines that were issued by the Bank of Ghana minimum capital directive by which all universal bands were required to increase their minimum paid-up capital to 400 million cities by 31st December 2018 in order to strengthen corporate governance structures across the industry Bank of Ghana published the banks and specialized deposit-taking institutions corporate governance directive in March 2018 to provide a framework to regulate corporate governance practices and banks mergers and acquisition director for banks fit and proper directive financial holding companies director for banks banking sector cyber and information security guidelines Basel regulatory capital requirements directed the rollout of the Basel 2 3 supervisory framework and ensuring the implementation of IFRS 9 by banks Bank of Ghana also addressed specific risks from high non-performing loans and poor risk management systems they strengthened the capacity and resources of the banking and supervisory supervision Department the Bank of Ghana has undertaken a comprehensive review and improvement of all supervisory processes and ensured strong enforcement of Prudential and regulatory requirements they continue to strengthen overall financial stability risk assessments and the establishment of adequate measures to promote stability of the financial system as part of the reform exercise the banking licenses of seven insolvent banks were revoked steps were taken by Bank of Ghana to ensure that they exited the markets in an orderly manner following the recapitalisation exercise that ended at the close of business on 31st December 2018 there are now 23 Universal banks operating in Ghana these banks have will maxed the new minimum and paid up capital of 400 million cities 16 banks met the new minimum paid-up capital requirements mainly through capitalization of income surplus and fresh capital injection the reform saw the approval by Bank of Ghana of three applications for mergers consequently first Atlantic merchant bank limited an energy commercial bank have merged Omni Bank and Bank Sahel Sahara have merged and First National Bank and ghl Bank have merged the three results in banks out of these mergers ensured that they match the new minimum paid-up capital requirement additionally as part of the adherence to the minimum capital directives private pension funds in Ghana have injected fresh equity capital in five indigenous banks through a special-purpose holding company named Ghana amalgamated trust in addition to the state-owned banks ADB ni be benefiting from the GAC scheme the other beneficiary banks the merged on the banks Sahel Sahara Universal Merchants Bank and Prudential Bank were selected by gas on the basis of their sole status and good corporate governance as part of the reform agenda GCB had to play a key role in the process following the revocation of the licenses of UT and Capitol banks in August 2017 the Bank of Ghana approved a purchase and assumption agreements allowing GCB to take away the deposits all the deposits and purchases of selected assets of the LCL banks the net gap that was created was funded through the issuance of an appropriate financial instrument our decision to assume these two banks was underpinned by the following factors to mitigate or eliminates potential market destabilization and provide for a market of relatively greater stability and consumer certainty to benefit from the expanded client base and gain access to markets hitherto unavailable to us and enhance growth and shareholder value following the acquisition GCB now has a total branch network of 183 spread across all the district capitals and municipalities of the country with this spread our valued customers can now boast a variability of access to our branches for better service delivery it is also worthy to note that the assumption of these two banks no doubt has significant impact on our expenditures staffing and systems rationalization which impacted our bottom line especially in 2017 DCP has also complied with a minimum capital requirements directive and that's at the end of 2018 our stated capital was 500 million Ghana cities the bank is resilient and has adequate capital to exploit our strategic objectives and take advantage of market opportunities whilst managing risk complexions associated with these initiatives furthermore a sponsor of the Bank of Ghana corporate governance directive GCSE board has gone through the following training programs as part of the process of ensuring good corporate governance corporate governance generally Bank of Ghana directives on corporate governance risk management ladies and gentlemen it has been an eventful reform period during which Bank of Ghana has had to take tough but necessary bold steps to clean up the banking sector and to reposition it to support the economic growth and transformation agenda for Ghana the just ended recapitalisation exercise has repositioned the banking sector as better capitalized liquid stronger and more resilient let me briefly highlight some of the pre and post reform key financial indicators at the start of the reforms in August 2017 total assets stood at 89 point 1 billion Ghana Cedis for a sector that had 36 banks two years after the reform process started total assets have increased to one hundred and twenty 1 billion Ghana Cedis as n October 2019 Evon with 23 banks in the same direction total deposits have improved from 55 point seven billion Ghana cities to 78 point nine billion Ghana cities over the same comparative period reflecting a stronger deposit base owing to more trust and confidence in the banking sector with fewer but stronger banks banks are beginning to refocus on their core mandate of financial intermediation based on the strong capital base of the recapitalization the industry's capital adequacy ratio computed in accordance with a new capital requirements directive under the basel ii three capital framework stood at 18.9% and when October 2019 well above the 13 percent minimum regulatory benchmark my expectation after the reforms is for shareholders of banks to exercise control over these institutions not for the benefit of shareholders and connected parties but primarily in the interest of depositors creditors employees and other stakeholders I believe that the continuous strengthening of the regulatory and supervisory framework by Bank of Ghana and all other stakeholders will ensure that the sector is well governed well-managed and better supervised to restore and maintain much-needed confidence in the sector in the medium to long term thank you [Music] you [Music]