Despite recent progress, four banks including one state-owned continue to be severely under-capitalised due to unmet capital commitments, higher non-performing loans and, in some cases, incomplete booking of credit impairments identified under BoG’s 2023 asset quality assessments, the International Monetary Fund has revealed.

Moreover, the Bretton Woods institution said one state-owned bank’s position has recently deteriorated.

However, it stressed in its Staff Report that the government has committed to complete recapitalising the two state-owned banks using budget resources by the end of 2025.

“Following Parliament’s rejection of the WB Ghana Financial Stability Fund (GFSF) A116, the authorities are working with the World Bank to repurpose these funds to address legacy issues in the Specialised Deposit-Taking sector. However, for other banks (including non-compliant undercapitalized ones), the authorities [Bank of Ghana, Ministry of Finance] stressed that any further public support will be limited to those posing systemic risks and structured “.

The Fund report added that capital support from the GFSF to two of these banks has tipped state-ownership interest into a majority position, highlighting that state interest is expected to revert to a non-majority status on completion of these banks’ respective negotiations with investors for their recapitalisation.

NIB Recapitalisation Plan on Course

Meanwhile, after delays, the Government and the Bank of Ghana have begun implementing the National Investment Bank’s (NIB) restructuring plan.

According to the Bank of Ghana, they have injected cash and bonds to bring NIB’s Capital Adequacy Ratio to full compliance with the minimum CAR of 13% (without forbearance) by end-May 2025, ahead of the end2025 timeline.

They have also initiated reforms to enhance governance and risk management, improve the business model, address additional resource needs and ensure viability of operations going forward.