Citi Business News has gathered three local banks Premium, GN and Sahel Sahara banks have agreed to merge.
The move follows the Bank of Ghanaâ€™s directive for all banks to meet the minimum capital requirement of 400 million cedis this year (2018).
Citi Business News has learnt the three banks commenced merger talks this year and finalized the deal this month- July 2018.
The deal is however yet to be approved by the central bank which has received the banks proposal to merge.
If approved by the central bank, it will be the first merger which will be undertaken by local banks as part of moves to meet the minimum capital bank.
The Capital Requirement Directive sets the requirement by which banks will calculate their level of capital as spelt out under the Banks and Specialised Deposit-taking Institutions Act.
Read: Local banks reduce staff to meet GHÂ¢400m minimum capital
The Bank of Ghana says its implementation of the new Capital Requirement Directive start on July 1, 2018 however; banks will be expected to start full compliance by January 1, 2019.
Management of new entity
Sources close to the discussions have told Citi Business News a name and logo and other branding related issues will also be finalized after the central bankâ€™s approval of the deal.
Also who takes over as the MD of the three entities as well as other top management positions will also be finalized after regulatory approval.
It is expected that some of the workers will be laid off as the new entity tries to avoid duplication of roles.
Premium bank prior to gaining banking status was a Finance house, under the name City Investments Company Limited.
It got the regulatory approval from the central bank to operate as a bank in the second quarter of 2016 and begun operations as a bank proper in the fourth quarter of 2016.
Its majority shareholder is the Vanguard group.
According to the bankâ€™s financial statement for December 2017 its profit before tax was a little over 12 million cedis, while its profit for the period was almost 12 million cedis.
Read: Accountant-General to stop state-owned enterprises from banking with commercial banks
The bankâ€™s assets sum up to about 1.3 billion cedis while it liabilities sum up to about
CEN-SAD is made up of 28 countries including; Libya, Sudan, Benin, Burkina Faso, Central African Republic, Cote dâ€™Ivoire, Gambia, Ghana, Guinea, Mali, Niger, Senegal, Chad and Togo where BSIC currently has affiliates.
The bankâ€™s profit before tax for December 2017 was about 7.8 million cedis a drop from the 10.3 million cedis recorded the year before.
GN Bank was incorporated on May 30, 1997.
GN bank is owned by Dr. Papa Kwesi NduomÂ a business man and politician.
The bankâ€™s CEO is Mr. Issah Adam.
The bank has over 298 branches across the country.
Local banks beg for extension
In April this year â€“ 2018, the President, Nana Addo Dankwa Akufo Addo, met some Managing Directors and Chief Executive Officers of local banks in the country to discuss the request for an extension in the deadline date of the minimum capital requirement for indigenous banks.
The local banks appealed for an extension of the timeline in meeting the minimum capital requirement from one year to four years.
By this, the local banks want the deadline to be extended from December 2018 to 2022.
Though the banks admit to the idea of recapitalization, they argue that the period requested for them to comply was short
In a letter to the President and signed by all the Managing Directors and Chief Executive Officers of the local banks, the local banks said they were in a better position to recapitalise up to GHÂ¢170 million by the end of 2018, GHÂ¢220 million by the end of 2019, GHÂ¢280 million in 2020, GHÂ¢340 million in 2021 and GHÂ¢400 million in 2022.