Renaissance Capital Initiates Coverage of Ghanaian Bank Industry

Renaissance Capital, the investment bank controlled by Russian billionaire Mikhail Prokhorov, initiated coverage of three lenders in Ghana, where it expects growth in banking assets and the economy.

“The successful elections and transfer of power in 2012 to a new government are key for the country’s macro outlook -- we expect gross domestic product growth of 6.5 percent in 2013,” RenCap analysts Adesoji Solanke and Nothando Ndebele said in an e-mailed note to clients today. “Renaissance Capital sees no significant near-term risks to the growth outlook and believes sector assets could double in four years.

The analysts recommend that investors buy shares of Ghana Commercial Bank Ltd., while they have a hold rating on Ecobank Ghana Ltd. and CAL Bank Ltd.

Ghana’s $35 billion economy is the second biggest in West Africa and is growing faster than the International Monetary Fund’s projection of about 5.8 percent for sub-Saharan Africa. RenCap, which is planning to sell some African, Russian and Ukrainian assets to stem losses, plans to operate in African markets still offering high growth rates. The company is retaining units in South Africa, Nigeria and Kenya.

‘‘Ghana seems to have the opportunity to increase its retail-banking penetration, especially relative to countries in southern and eastern Africa,” the analysts said. “As domestic competition increases in Ghana, there is scope for the Nigerian banks to gain more market share via innovation.”

Nigerian banks operating in Ghana include Zenith Bank Plc, Guaranty Trust Bank Plc, United bank for Africa Plc and Access Bank Plc.

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