Bank of Baroda, an Indian lender, says it is planning to sell its Ghanaian business, in order to enable it to focus on its most profitable subsidiaries.
The lender’s decision comes on the back of poor performance by banks in the West African country. So far, a total of seven have either collapsed or had their licenses revoked by Ghana’s central bank, while a handful of others are said to be racing against time to meet a new Gh400 million minimum capital requirement by the end of December 2018.
“Some of these subsidiaries are not performing as per expectation. Hence, we decided to exit. Unlike Uganda and Kenya, which are both listed subsidiaries, Ghana and Trinidad and Tobago are not core to our business,” an official of the bank said.
Ghana’s banking crisis which began about 12 months ago, according to many experts, is partly due to rising non-performing loans which stood at Gh8.6 billion at the end of April 2018, as well as weak corporate governance.
According to sources, the Indian bank also plans to sell its Trinidad and Tobago business.
Bank of Baroda launched its Ghanaian subsidiary in February 2008. In its financial reports for the period ending June 30, 2018, the company reported net interest income estimated at GH19.1 million while a year earlier, it was GH20.4 million.