Performance of Merged and Distressed Banks in Ghana

The recent banking sector shakeup in Ghana resulted in a wave of bank failures, leading to mergers and consolidations of several banks. This study analyses the financial performance of commercial banks before the crises of the banking sector in 2017. Four out of the affected banks were selected based on the availability of financials over four years. Profitability, risk, and insolvency ratios supported by Z-score were used. Banks' debt management strategies were found to be weak, as reflected in debt-to-equity and debt-to-assets performances. We, therefore, conclude that all the banks studied met the conditions precedent to be declared distressed and insolvent. Flowing from this, we recommend that commercial banks operate within their authorised single obligor limits and strictly observe best credit management practices as contained in the Basel II accord on Banking Supervision