The Bank of Ghana (BoG) has given has approved the planned merger talks between First Atlantic Bank and Energy Commercial Bank.

Sources  say the Central Bank’s approval was communicated on Friday, December 14, 2018.

The approval means  discussions can begin having secured all the documents that give more information about the merger between the two banks.

According to BoG, its own regulations direct that it is expected to review the documents that two parties have submitted.

ALSO READ: First Atlantic Bank acquires Energy Commercial Bank

The merger talks would help the two banks to fast-track the process in meeting the new minimum capital requirement of 400 million cedis by December 31 as set by BoG.

The two banks are entering into this “marriage” after Energy Commercial Bank failed to raise the targeted amount of ¢340 million tohelp meet the new minimum capital requirement of ¢400 million.

This resulted in the two banks signing a MoU to merge their business to help them meet the new capital levels set by the BoG.

the “takeover” has come about as a result of the inability of Energy Bank to raise the required amount to help them meet the new BoG ¢400 million capital requirement.

Energy Bank was hoping to raise the remaining amount through its Initial Public Offering (IPO) to raise some ¢340 million cedis, which was not successful.

“The minimum amount to make the Offer successful was not raised and therefore refunds will be made to all applicants. Applicants are advised to contact receiving agents or receiving banks where they applied for shares in the Offer to receive their refund,” the Bank said in a statement.

About the two banks

Energy Bank Ghana Limited was incorporated in 2009 as a private limited liability company. Energy Commercial Bank presently operates 12 branches in Ghana- five in Accra, three in Kumasi, and the rest in Tema, Takoradi and Tamale.

Energy Bank’s third quarter financial ending September 2018 puts its stated capital at ¢60 million, while profit for the third quarter was at ¢966,000.

First Atlantic Bank started operations in 2011. According to its third-quarter results, the bank has posted a profit after tax of ¢18.9 million, while stated capital was put at ¢169 million.