More alliances forecast in Ghana banking sector

ACCRA: A PROMINENT Ghanaian banking consultant has projected more acquisitions and mergers in the sector following Fidelity Bank Ghana Limited’s 100 percent purchase of ProCredit Savings and Loans Company Limited this week.

“The chances are that we are going to see more of that rather than less of that, for the simple reason that there are four structures in the bank financial institutional sector in Ghana at the top is the universal banks, then we have the savings and loans companies, the rural community banks then the microfinance each of these sectors is serving a niche market or a set of clients and therefore if a universal bank now moves to the second structure  and buys one then now they are seeing that they can combine the niche they have in the universal banking sector to the savings and loans sector and the chances are that they will move down the structure from the universal bank to the savings and loan then to the rural community bank then the microfinance,” said Nana Otua Acheampong, who is the Principal Consultant at Osei Tutu II Centre for Executive Education & Research.

Acheampong added the mergers would help banks to grow, integrate and expand their business.

“This way, they are building what we call vertical integration where they are integrating, expanding and growing vertically within the same industry but at different sectors in the industry.”

Fidelity Bank’s acquisition of ProCredit will see  it expanding its branch network to 80 across the country, with 96 ATMs, 300 agencies and more than 700 000 customers across the country.

SOURCE: CAJ News Agency