Fidelity Bank has met the Central Bank’s GH¢400million minimum capital requirement, a month ahead of the December 31 deadline, Edward Effah, Board Chairman of the bank, has said.
Speaking to the media after the bank held an Emergency General Meeting (EGM) which saw shareholders pass a special resolution to complete the capitalisation requirement, Mr. Effah, noted that the bank has become stronger and well positioned to aid the socio-economic development of Ghana.
“We need the capital for our business. Even if the Bank of Ghana hadn’t raised the capital, we would have raised the capital ourselves. Our financial performance for 2018 was excellent and Fidelity is one of the strongest banks in Ghana.
In 12 years we have built the fourth largest bank in the country. In terms of deposit we are very strong and our balance sheet is very impressive as well. We have also been very involved in social development in Ghana. We are the only bank with an inclusive banking agenda and we are supporting a lot of SMEs,” he said.
To meet the new capital, Fidelity Bank moved GH¢70million from its retained earnings and raised GH¢70million in fresh capital to augment its existing GH¢260million of stated capital.
“The GH¢400million means an additional capital of GH¢140million and we do need that capital not just to meet the minimum capital requirement but to grow our business,” the board chairman added.
The Central Bank recently noted that so far only 22 banks have met the requirement and with Fidelity making this announcement now, it means the Central Bank, which is always notified ahead of such announcements, counts Fidelity as one of the 22.
Mr. Effah explained that the bank has led the socio-economic development of the country. “We have built about five out of the last 10 power stations to power this country. We are a strong local bank that is positioned to contribute significantly to the socio-economic development of Ghana,” he said.
Touching on new risk and credit regimes ready to take off in 2019 such as the Basell II and IFRS9, Mr. Effah noted that these regulations will require additional capital but Fidelity is well positioned to meet them.
“Under the new Basel II requirement of the Bank of Ghana, we do need more capital and we are ready for that. We also do not envisage a significant increment in the capital requirement when it comes to IFRS9 but we are ready,” he said.
He urged bankers and the general public to always remember that these [Basell II and IFRS9] are good policies for banks. “They are not there to obstruct banks but to make banks more prudent and safer.”
Fidelity Bank in 2014 acquired Procredit, a savings and loans company, which saw its branch network increase and opened its doors to SMEs. The bank subsequently, after the approval of the Central Bank, introduced agency banking as part of its expansion drive. This saw Fidelity move into aggressively into the informal sector.
These moves, analysts point out have positioned the bank as one of the strongest in terms of deposits and client services.