Six Ghanaian banks may require mergers, additional capital injections, or extended regulatory relief to meet capital requirements, Fitch Ratings has said.
While the majority of Ghanaian banks are on track to achieve capital compliance once temporary regulatory forbearance expires at the end of 2025, Fitch warned that these six banks cannot rely on internal earnings alone to reach the required levels.
Of the six, two are government-owned banks that have already received capital injections from the authorities. Fitch noted that further government support may be needed, although it may not materialize before the end of 2025.
“The banking sector’s tangible common equity to tangible assets ratio improved to 10.3% at end-1Q25 from 7.4% at end-2022,” Fitch said, reflecting the recovery of the sector after the losses incurred during Ghana’s domestic debt exchange programme (DDEP).
Fitch added that the improvement was driven by strong profitability from high interest rates, low credit growth, and a more than 40% appreciation of the cedi against the US dollar, which helped deflate foreign-currency-denominated assets in cedi terms.
“Most banks will be comfortably compliant when the remaining 25% of the losses on cedi government bonds is phased into regulatory capital at end-2025,” the agency said, noting that private banks have generally not required additional capital support.
The report highlights the need for strategic interventions for undercapitalized banks to safeguard stability in Ghana’s banking sector, even as the broader industry shows signs of recovery.
