UNITED OF AMERICA
STUDENT NAME: BENJAMIN AGYAPONG-SARQUAH
STUDENT ID NUMBER: 7250653
PROGRAM OF STUDY: BACHELOR OF ART BUSINESS STUDIES
COURSE OF STUDY: RESEARCH
PURPOSE OF RESEARCH: PROJECT RESEARCH
AREA OF RESEARCH: THE IMPACT OF OPERATION OF RISK IN BANKING ASSIGNMENT: SUBMISSION OF PROJECT WORK CHAPTER ONE
This chapter reviews relevant literature on Standard Chartered Bank Ghana Limited, the Ghanaian Banking Industry, Regulation and Basel II, and Operation Risk Management (ORM).
Standard Chartered Bank Ghana Limited
Standard Chartered Bank Ghana Limited (SCBGL) is a 65% owned subsidiary of Standard Chartered Holdings (Africa) BV which, in turn is owned 100% by the Standard Chartered PLC of United Kingdom (UK). Standard Chartered Holdings (Africa) BV is incorporated in the Netherlands. SCBGL is a limited liability entity registered in Ghana on 18th September ,1970 pursuant to the Companies Code 1963 (179), under Certificate of Incorporation number 4576. Standard Chartered Bank Ghana Limited initially commenced its operations in the then Gold Coast in 1896, under the name of “Bank of British West Africa”. This was the first bank to be established in Ghana with a unique role in monetizing the economy whilst acting as the Central Bank of the then British colony. On Ghana’s attainment of independence in 1957, the bank’s name was change to “Bank of West Africa Limited”. In 1965, as a result of a merger with Standard Bank Limited (England), the name was further changed to “Standard Bank of West Africa Limited” and subsequently, “Standard Bank (Ghana) Limited” (SCBGL, 2005).
The Banking Industry of Ghana
Currently, the banking system in Ghana consists of the central bank called the Bank of Ghana (BOG), 28 licensed (universal) banks and 124 rural banks. The rural banks are supervised by the ARB Apex Bank under the direction of BOG. According to the GBS Report (2008), 6 out of the 28 banks are currently trading on the Ghana Stock Exchange. They are Ghana Commercial Bank, SG-SSB Bank, Standard Chartered Bank Ghana Limited, Cal Bank, HFC Bank, and Eco Bank Ghana. The Ghanaian banking industry through the universal banking license has created a level playing field and has opened the industry to high level of competition, innovation and entry of new banks. Between 2005 and 2007, seven banks entered Ghana’s banking industry. Two of them that obtained their licenses in 2007 are Bank of Baroda and Sahara Bank of Indian and Libyan nationality, respectively. The current ownership structures of banks in Ghana are made up of Ghanaians, British, Nigerians, South Africans, Malaysians, French, Indians and the Arabs. Some of these banks have concentrated primarily on the retail segment while others have their focus on corporate clients. As at June 2008, the industry had registered a total of 15 foreign banks (non-Ghanaian banks) that are actively engaged in the banking business. The table 1 represents registered names and abbreviations, number of branches of licensed local and foreign banks operating in the banking industry (GBS 2008).
Table 1: Local and foreign banks in Ghana
Name| Abbreviation| Branch| Ownership|
Agriculture Development Bank| ADB| 50| Ghanaian|
Amalgamated Bank Limited| ABL| 10| Non-Ghanaian|
ARB Apex Bank(Rural banks)| ARB| 124| Ghanaian|
Bank of Baroda| -| 1| Non-Ghanaian|
Banque Sahelo-Saharienne | BSIC| 1| Non-Ghanaian|
Barclays Bank of Ghana Ltd| BBG| 95| Non-Ghanaian|
BPI Bank Limited| BPI| 7| Non-Ghanaian|
Cal Bank Ghana Limited| CAL| 10| Ghanaian|
Citi Bank Ghana Limited| -| -| Non-Ghanaian|
Eco Bank Ghana Limited| EBG| 32| Non-Ghanaian|
Fidelity Bank Limited| FBL| 6| Ghanaian|
First Atlantic Merchant Bank| FAMBL| 4| Ghanaian|
Ghana Commercial Bank| GCB| 136| Ghanaian|
Ghana International Bank...