Bank Recapitalization in Ghana, Who Benefits the More?
Purpose: The study seeks to ascertain whether the impact of the 2012 recapitalization directive by the Bank of Ghana on bank performance differs between domestic and foreign banks. Data/Methodology: We collected from annual reports of banks in Ghana from 2009 to 2015. We employ the paired sample t-test on three indicators of bank performance (i.e. return on assets (ROA), return on equity (ROE), and profit before tax (PBT) margin). We divided the data into periods before the 2012 recapitalization (i.e., 2009-2011) and those after the recapitalization (i.e., 2013-2015). Findings: The study shows that the recapitalization policy by the BOG benefited foreign-owned banks the more. Indeed, foreign banks gained 2.47, 27.36, and 23.91 percentage points as against 1.46, 7.41, and 9.95 percentage points for domestic banks on ROA, ROE, and PBT margin respectively. Originality/Value: This study is the first to compare the effect of regulatory capital requirement by the BOG on foreign and domestic banks in Ghana.
