Speaking to Citi News’ Umaru Sanda Amadu, the Executive Director of EOCO, K. K. Amoah, said the directors in question had until 5:00pm today to report.

[contextly_sidebar id=”KaToAZrKrBiEYzbnMdyCUeE7Jr9y6mdc”]Without providing details, he said his team would take the next step of action should the directors fail to report by the 5:00pm deadline.

“They should not create problems for themselves. They shouldn’t,” Mr. Amoah warned.

Former Directors of Capital Bank, which also collapsed alongside UT Bank, will also appear before EOCO next Wednesday.

The two banks were taken over by the Bank of Ghana in 2017, and subsequently handed over to GCB Bank.

The liabilities of the banks, according to the central bank, overwhelmed their assets, leaving them with no option but to undertake a purchase and assumption transaction as the least costly method of dealing with a collapse.

Following findings of an investigative report, EOCO said it is probing further the issues surrounding the liquidation, but it is having difficulties reaching the directors of the collapsed banks.

But the investigation is yet to start in full force, according to the EOCO boss.

“It is a normal investigative process that we are doing. It is a complaint that we are investigating. We haven’t even commenced the investigation,” Mr. Amoah said.

“We gave them today. We are hoping that by the close of today they come. We gave them 9:30 this morning, and we are hoping that by the close of day, by 5:00 pm [they come],” he added.

Citi News also understands that Managers of uniBank which was recently taken over by the BoG with KPMG as the administrator will also be invited by EOCO in due course.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Don’t create problems for yourselves – EOCO warns UT Bank directors appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to her, once the takeover of the two banks was confirmed, the BoG immediately began working towards ensuring that the assets of the banks were secure.

“In the case of UT Bank and Capital Bank we were winding up those banks and the first order of business was to immediately lay hands on assets to be able to recover value and take them back,” she said.

She noted that the management of BoG has proceeded to investigate the top management of the banks and would finalize the reports in due time.

“The management of the Bank of Ghana stands by its word to complete the investigation. We will definitely get all other institutions involved in following up the result of the investigation and there is no doubt about our commitment to that,” she said.

In August 2017, the Bank of Ghana (BoG)  said it would investigate and sanction officials whose activities led to the collapse of the two banks

“The last phase of the BoG’s action would involve a thorough investigation of operations of UT Bank and Capital Bank and appropriate action will be taken against shareholders, Directors, and key a Management personnel who are found to be culpable,” the BoG Governor, Dr. Ernest Addison revealed during a press conference.

“We have not sent any auditor there what we have said is that we are in the process of sending a team which includes chartered accountants, lawyers, and bankers. The Governor said there will be an investigation, we have to get approval from public procurement before we can start because this is a very sensitive issue, not something that you go through public tender.”

The two banks declared insolvency following their inability to turn around their negative capital adequacy positions.

This necessitated a Purchase and Assumption agreement allowing GCB Bank to take over all deposit liabilities and selected assets of both UT Bank and Capital Bank, per section 123 of the Banks and Specialised Deposit-Taking Institutions (SDIs) Act, 2016 (Act 930).

The governor of the Central Bank noted that “UT Bank and Capital Bank were heavily deficient in capital and liquidity and their continuous operation could have jeopardized not only their depositors’ funds, but also posed a threat to the stability of the financial system.”

“It, therefore, became necessary for the Bank of Ghana to revoke their licenses and approve a Purchase and Assumption (P&A) transaction to allow GCB Bank, a large bank with the right balance sheet, to take over all deposits and selected assets of UT Bank and Capital Bank.”

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By: Farida Yusif/citifmonline.com/Ghana

The post Probe into UT, Capital Banks’ collapse not yet complete – Elsie Awadzie appeared first on Citi 97.3 FM - Relevant Radio. Always.

This is the warning from Economist, Dr. Ebo Turkson.

According to him, the assurance of absorption of debts after a possible collapse could make private banks less competitive in giving value for money for customers.

The government is hoping to issue a 2 billion cedi bond to settle the total liabilities of UT and Capital banks estimated at 1.6 billion cedis.

It also follows their absorption by GCB Bank in a purchase and assumption agreement, last year.

But Dr. Ebo Turkson tells Citi Business News the government must be guided with the decision.

“This doesn’t send any positive signal to private banks; that when things are not managed properly and there is a takeover, to maintain the credibility of the financial system, they will get the government coming in to pay up for their mess,” he argued.

The announcement of issuing a bond to clear the debts has been met with mixed reactions.

The Minority in Parliament, for instance, has lamented the possible impact of the move on the taxpayer as it will add unto the debt burden.

Dr. Ebo Turkson admits to the need to protect GCB Bank from any financial shock but wants government to pursue any traceable assets of the two collapsed banks while holding the shareholders accountable for any harm to the financial sector.

“GCB is largely a public bank and probably one of the largest banks and so it is good we help capitalize the bank and not lead it into problems because it had to absorb UT and Capital banks. But I think that even if we are going to pay for that, the government should try as much as possible to hold the shareholders of those two banks liable so that if they have any asset that we could go and take hold of, we should do that,” he observed.

PwC accepts bids for sale of UT, Capital banks’ assets

Meanwhile the Joint Receivers of the transaction, PricewaterhouseCoopers (PwC), has advertised the invitation of bids for the sale of assets of UT and Capital banks.

The assets include; land and buildings, motor vehicles as well as chattel assets such as furniture, fittings, computers and other office equipment.

The deadline for the submission of bids is Monday, 19^th March, 2018.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Banking sector faces distortion over GH¢2bn bond for UT, Capital banks’ debt appeared first on Citi 97.3 FM - Relevant Radio. Always.

This follows the completion of the full integration of the systems of the two banks.

The twenty two branches were part of a total of fifty-three branches assumed by GCB Bank in August 2017.

A statement on the move and copied to Citi Business News said the decision to maintain the 22 branches was ‘based on their location and accessibility to customers.’

It is unclear how many branches each belonging to UT or Capital banks have been retained.

But Citi Business News understands that the move brings GCB Bank’s total branches across the country to 183.

The Bank of Ghana in August 2017, allowed GCB Bank to assume management of UT and Capital Banks in a purchase and assumption agreement.

This also came on the back of the fact that the two banks faced serious liquidity challenges at the time which affected the continuous existence and the financial industry altogether.

70% staff of UT, Capital bank retained

Meanwhile GCB Bank has absorbed about seventy percent of the permanent staff of defunct UT and Capital Banks.

“As a result of the integration, staff numbers have been rationalized and GCB has absorbed almost 70 percent of the permanent staff of those banks,” GCB Bank said in a statement.

However, GCB Bank has dispensed the services of contract staff of the two banks.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post GCB Bank retains 22 branches of UT, Capital banks appeared first on Citi 97.3 FM - Relevant Radio. Always.

It follows the completion of the full integration of the systems of the two banks.

A statement on the issue and copied to Citi Business News said, “As a result of the integration, staff numbers have been rationalized and GCB has absorbed almost 70 percent of the permanent staff of those banks.”

However, GCB Bank has dispensed the services of contract staff of the two banks.

According to GCB Bank, “Departing employees are to be paid a month’s salary in lieu of notice plus any earned leave since August last year.”

The statement added, “The Bank in undertaking this exercise was mindful of its economic and social impact and therefore went to great lengths to strike the right balance in the interest of all stakeholders.”

The Bank of Ghana in August 2017, allowed GCB Bank to assume management of UT and Capital Banks in a purchase and assumption agreement.

This also came on the back of the fact that the two banks faced serious liquidity challenges at the time which affected the continuous existence and the financial industry altogether.

Citi Business News understands that the integration included the consolidation of core banking applications, procedures and processes, the training of staff and the streamlining of the branch network.

Meanwhile GCB says it has retained 22 out of the 53 branches of the defunct institutions based on their location and accessibility to customers.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post GCB Bank absorbs 70% of UT, Capital banks’ staff appeared first on Citi 97.3 FM - Relevant Radio. Always.

PwC is undertaking this exercise in its capacity as the receiver of the purchase and assumption agreement between GCB Bank and the two defunct banks.

Information available to Citi Business News indicates that the letters are being served to all employees of the two affected banks.

[contextly_sidebar id=”vgb3LEkSfY7citvESLbGJyySGNFaUAsW”]This is expected to affect about one thousand workers both of former UT and Capital banks.

According to PwC, any claim of the workers in terms of salary arrears, wages, leave, severance pay and other entitlement will be dealt with in accordance with the provisions of the Labour Act, 2003 (Act 651) and the Banks and Specialized Deposit Taking Institutions Act, 2016 (Act 930).

“Your contract of employment with UT has been terminated as a result of the receivership effective 14 August 2017. Any claim you have against UT such as arrears of salaries, wages, leave, severance pay and other entitlement will be dealt with in accordance with the provisions of the Labour Act, 2003 (Act 651) and the Banks and Specialized Deposit Taking Institutions Act, 2016 (Act 930)”, portions of the letter stated.

Meanwhile, PwC says it will engage with the necessary workers Union or representatives in the provision of what is due the workers.

But the payment of part or all of the amounts due the workers will be dependent on the timing and level of realization of the two banks’ assets.

The Managing Director of GCB Bank, Ray Sowah, in an earlier interview with Citi Business News said his outfit will absorb some of the workers.

Mr. Sowah however explained that would be achieved after a skills assessment.

“We shall conduct a skills assessment. As part of integration process we need to know that we can bring everyone on board or not. This is an expanded institution and as we go through the integration, we should know what jobs to close down and what jobs to retain,” he remarked.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Contract of UT, Capital bank workers terminated appeared first on Citi 97.3 FM - Relevant Radio. Always.

At a meeting to discuss the management of their pension funds, the Secretary General of the Trades Union Congress (TUC), Dr. Anthony Yaw Baah called for closer collaboration to address all the questions surrounding the health of their funds.

[contextly_sidebar id=”W1Mk14m93S2v4uI3KOUc1YywrgFwn5sz”]“We will want to encourage them to engage us as much as possible. I was happy to hear that the receiver is planning to meet with TUC… the Bank of Ghana is here and I think that is the way to go.”

The Minister for Employment and Labour Relations, Ignatius Baffour Awuah, who was in the meeting with Bank of Ghana officials, assured worried members of organized labor that government will ensure their interests are protected.

“What we seek to do is ensure that we maintain a very sound and strong financial environment, where people are bold enough to deposit their monies there and that they would also be bold enough to walk to the banks to if the need be for assistance to help in whatever they want to do,” he said.

No cause for alarm

Also on the matter of pensions, the National Pensions Regulatory Authority (NPRA) assured the current pensions law adequately protects all contributors.

In a statement, it said, “trustees who have appointed UT Bank as their custodian bank to be rest assured that pension funds in custody of the bank are not affected by the purchased and takeover by GCB Bank and the subsequent withdrawals of their license by the Bank of Ghana.”

“The National Pensions Act, 2008 (Act 766), as amended, had made special provisions for such takeovers in section 209 (1 and 2) and, therefore, there was no cause for alarm,” the NPRA added in the statement.

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By: Kojo Agyemang/citifmonline.com/Ghana

The post Banks collapse: Protect our pension funds – TUC appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”MSRv13L6xnU3uKuFQmDQHIRvGwtCwoS3″]Delivering a sermon on peace today [Sunday], Pastor Otabil who is Board Chairman of the Bank laughed the development off, saying : “The reality is what is happening now and I experienced quite a bit of that this week. Reality is when you hear stuff you don’t want to hear. When people are insulting you – people who have no right to insult you are insulting you. People who look like an insult to themselves are insulting you… but that’s reality. ”

While admitting to a turbulent week after the collapse, he also indicated that the development had taught him the hard lesson that there are persons who only rejoice over the misfortunes of others.

“There are people when you are down they feel up because they have been down for so long…There are people who will kick you when you are down and sometimes people you have helped will kick you when you are down, people you have encouraged will kick you when you are down and that’s the reality,” he said.

The Central Bank, a few days ago, authorized GCB to take over Capital and UT Banks.

The collapsed banks were “unable to develop an acceptable plan”, according to the BoG, which indicated in a statement that it made efforts to help UT Bank and Capital Bank recover via private alternatives.

The Central Bank said there were “repeated agreements between the Bank of Ghana and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls.”

However, the owners and managers of UT Bank and Capital Bank were unable to increase the capital of the banks to address the insolvency.

Purchase and Assumption agreement allows GCB Bank to take over all deposit liabilities and selected assets of both UT Bank and Capital Bank, per section 123 of the Banks and Specialised Deposit-Taking Institutions (SDIs) Act, 2016 (Act 930).

The BoG in its statement said the GCB Bank took over UT Bank and Capital Bank “as part of efforts to extend their reach and grow their balance sheet to position them to support large transactions in a fast growing economy.”

GCB will take over all the depositors’ funds and will continue to provide normal banking services to customers and depositors of the two collapsed banks will now become customers of GCB Bank.

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By: Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

The post People insulted me after Capital bank’s collapse – Otabil appeared first on Citi 97.3 FM - Relevant Radio. Always.

During his sermon on peace today [Sunday] he recounted that “Monday was a fortunately good day for me. I was fine on Monday. Tuesday was a very bad day for me. Wednesday was a very terrible day. You go through this stuff and you wonder; wow, what a week!”

[contextly_sidebar id=”ROLvSUI09HMQF4Buxs1LsImO7vJKVIml”]But this experience only served to provide Pastor Otabil with another testimony of God’s goodness to him as he said, “on Thursday morning, I started feeling God’s favour.”

The pastor normally starts the preparation of his Sunday sermons on Tuesdays, however, “this Tuesday, I was not in a frame of mind for a sermon. This was not sermon Tuesday.”

“Wednesday definitely wasn’t a sermon Wednesday” either for Pastor Otabil, who faced some criticism for the running of the Capital Bank as revelations of negligence at its top level seeped into the public domain.

“But on Thursday, I got up, I picked my laptop, I opened it and Thursday, I put my ideas down like I normally do and all of a sudden, I just felt like a cloud just left my shoulders.”

The collapse of Capital Bank and UT Bank marked a seismic shift in Ghana’s banking sector. The two banks were heavily deficient in capital and liquidity.

It, therefore, became necessary for the Bank of Ghana to revoke their licenses and approve a Purchase and Assumption transaction to allow GCB Bank to take over deposits and selected assets of UT Bank and Capital Bank.

A leaked 2014 memo published in the Insight Newspaper in 2015 revealed that Capital Bank, then First Capital Plus Bank, was on the verge of collapse.

The bank’s Chief Executive Officer at the time even described the situation as a “time bomb” as he warned that Capital Bank had capitalization issues and may not be able to meet its obligations to its clients.

The memo addressed to the Board of the Bank, also outlined cases of mismanagement that had compromised their shareholder’s credibility and he urged that it take drastic and urgent steps to resolve the bank’s situation.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Mensa Otabil admits to rough week after bank collapse appeared first on Citi 97.3 FM - Relevant Radio. Always.

The growing financial industry is ripe to absorb the staff that will be laid off, Mr. Imihere said on The Big Issue.

[contextly_sidebar id=”BMmXKbD2KEkt8ks2cWsozVgQ6LQjKvnG”]The top-level management of the two collapsed banks will certainly lose their jobs but it is unclear the fate of the other workers, numbering close to 2,000.

Indications are that negotiations are in place to protect those who wish to work for GCB Bank, which stepped in to assume the assets and liabilities of the distressed banks.

GCB Bank has said it will undertake a skills assessment of the staff to determine staff should be retained or laid off as part of a six-month probation.

When it is all said and done, it is expected that at least a quarter of workers of both banks will be absorbed while the remaining are likely to lose their jobs.

But, Mr. Imihere said these job losses fit seamlessly into the already existing high corporate mortality rate in Ghana.

“Don’t cry for those 75 percent [who lose their jobs] because they are going to get jobs. Ghana’s financial industry is growing at a faster rate than ever before. This year we have had licences for about four new banks which are looking for people to man the branches they are opening.”

These new banks would ultimately prefer personnel with experience in the banking sector already, he added.

“If you are a construction bank which has just opened and you want to open a new branch, where is the first place you will go to? Rather than training a fresh Legon graduate from the scratch, you would go and find someone from UT Bank or Capital Bank as long as he has not been tainted by all this.”

“The staff basically will be safe, apart from those who are found to have been guilty of professional misconduct, they will all get jobs within a very very quick time,” Mr. Imihere concluded.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Banks collapse: Laid off workers will survive – Toma Imihere appeared first on Citi 97.3 FM - Relevant Radio. Always.