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WorldAugust 1 2013

Ghanaian banks bet on the long term

Ghana’s banking industry is buoyant, benefiting handsomely from huge leaps in the country’s economic growth. But with fears the economy is overheating and competition for business fierce, what is the longer-term outlook for Ghana's banks?
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Ghanaian banks bet on the long term

Ghanaian newspapers are full of advertisements from banks trying to tempt people to deposit money. CAL Bank, a mid-sized lender, is offering anybody who deposits 300 cedis ($147) the chance to win flat-screen televisions, smartphones and microwave ovens. If they up their balance to 1500 cedis, they might even win a house. Plenty of other banks have similar campaigns under way, including Ghana Commercial Bank (GCB) and Barclays, the west African country’s second and third largest banks by assets, respectively. “Everyone is scrambling for deposits,” says Simon Dornoo, head of GCB.

The push to raise deposits demonstrates how determined Ghana’s banks are to maintain the pace of expansion they have experienced in recent years. For the past seven years, assets across the sector have risen at an average annual rate of 32%, according to investment bank Renaissance Capital. This has chiefly been possible because of banks’ ability to grow their deposit bases just as quickly.

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