A statement from the GSE said the action was taken pursuant to section 7 of the GSE Automated Trading rules.

“With reference to Section 7 of the GSE Automated Trading Rules (ATS), the Managing Director of the Ghana Stock Exchange (GSE), in consultation with the Chairman of the GSE Council has suspended trading in the shares of ADB effective March 7, 2018.”

[contextly_sidebar id=”te1NaUQUEZ69MpLl44jZ9HCj94eeM0ol”]“We are taking this action so that ADB provides full information and clarity on the matter including whether the purported take-over complies with the Securities and Exchange Commission and the Bank of Ghana requirements,” the statement GSE added.

uniBank has confirmed to Citi News that it has gone into a transaction with four major shareholders of Agricultural Development Bank (adb), that has effectively given them majority control of the state bank.

It says the move follows the pledging of shares and voting rights of the consortium of shareholders in adb Bank.

Belstar Capital, Starmount Development company, EDC as well as SIC Financial Services Limited, have all pledged their shares, proceeds, entitlement and voting rights to Unibank.

It is still unclear what informed the decision of the shareholders.

But speaking on the Citi Breakfast Show on Wednesday, the CEO of Unibank, Dr. Kwabena Duffour Jr. said the plan is in the best interest of the banking industry.

“For now, we have the power and control to change it from adb. Down the line we might decide to do a proper transfer where we will need the approval of the various regulatory bodies but for now we have the power and control over it,” he added.

Dr. Duffour Jr however failed to give further details on how they managed to secure the deal in adb saying “I’m not at liberty to discuss the underlining transaction.”

Although the state of affairs now does not constitute a takeover of adb by uniBank, this comes on the back of the takeover of UT and Capital banks by GCB bank in 2017.

The Bank of Ghana gave GCB bank the permission to purchase the two banks because they were unable to increase the capital requirements needed for their banking operations.

With the latest development, it is unclear what happens to government’s intention of merging state banks adb and the National Investment Bank (NIB), as announced by the Finance Minister in the 2018 budget statement presented to Parliament.

adb IPO row

The adb bank commenced its Initial Public Offer (IPO) in July 3, 2015.

Prior to that the bank was forced to put the IPO on hold several times following some agitations from the workers and some Ghanaians.

The Member of Parliament for the New Juaben South constituency, Dr. Mark Assibey-Yeboah also dragged the bank to the Supreme Court insisting that the Bank’s IPO should first be approved by parliament.

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By: citifmonline.com/Ghana

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The research (which can be found here) indicated that indigenous banks were more at risk than foreign owned banks, possibly, because the foreign banks adhered to stricter standards.

[contextly_sidebar id=”qHkJK6J6WzQXrQyVLfUgEI9aT8OlXuG1″]The objective of their study was to construct an overall risk index to ascertain risk level of banks listed on Ghana Stock Exchange (GSE) and to ascertain whether there is a significant relationship between risk management and bank performance.

Secondary data of all listed banks on GSE over the period 2007–2014 was used for the study and their findings show that banks listed on Ghana Stock Exchange have declining risk indexes on average over the latter part of the study period.

According to the researchers, this meant the Bank of Ghana (BoG) may have to impose additional prudential and regulatory requirements, i.e. regulations to mandate financial firms to control risks and hold adequate capital as defined by capital requirements. This would ensure that banks remain solvent.

“Based on the summary of risk level of GSE listed banks computed using the risk index suggested by Hannan and Hanweck (1988), it was found that, the safest GSE listed bank for period under study was SGG Societé Generale Bank. General impression is that, indigenous Ghanaian listed banks has lower risk index relative to foreign listed banks. However, the most risky GSE listed bank was UT bank,” the study noted.

UT Bank’s woes

The GSE suspended the listing status of UT Bank following its collapse, subsequent takeover by GCB Bank and the revocation of its licence by the Bank the of Ghana because of its heavy capital impairment.

The GSE noted that UT Bank has failed to publish its financial results since December 31, 2015.

UT Bank had its licence revoked alongside Capital Bank, which also collapsed and has been taken over GCB Bank.

UT Bank’s current challenges are linked to its high non-performing loans portfolio, which has greatly affected the bank’s financial performance.

The inability of the company to disclose its financials also led to a seizure of its operations temporarily by the Ghana Stock Exchange in January 2017.

UT Bank, formerly known as Best Financial Services, later UT Financial Limited, was incorporated on April 18, 1996 under the Companies Code, 1963 (ACT 179) as a private limited liability company.

On February 19, 1997, the Bank of Ghana formally granted the company a license to operate as a non-bank financial institution and a certificate to commence business on April 24, 1997.

UT Bank was founded by Prince Kofi Amoabeng and Joseph Nsonamoah on April 18, 1996 and is headquartered at Airport, in Accra, Ghana.

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

The post UT was riskiest bank on Stock Exchange – Study appeared first on Citi 97.3 FM - Relevant Radio. Always.

This was revealed by the Chief Executive Officer (CEO) of GCB, Raymond Sowah on Tuesday during a press conference.

[contextly_sidebar id=”AFJEvTwCN1RpEhWkiaa5m8ezYB8dp6Vm”]“…We shall conduct a skills assessment as part of integration process we need to know that we can bring everyone onboard 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 added.

He made the comment on the back of GCB’s force takeover of UT and Capital banks on Monday.

GCB bank was given the opportunity to assume ownership of the two banks because according to the Bank of Ghana (BoG) they have “severe impairment of their capital.”

BoG also revoked the licenses of the two banks while the Ghana Stock Exchange (GSE) also suspended the listing status of UT Bank.

Citi News understands that the staff of the two banks who are a little over a thousand will be under probation for about six months under GCB before termination of their contracts.

It is believed that following the probation at least a quarter of workers of both banks will be absorbed while the remaining are likely to lose their jobs.

Mr. Sowah at the press conference also explained that the decision to acquire the two banks was not an easy task.

“GCB was the most profitable bank last year. We must be doing something right to have gotten ourselves to that position. Banks go through some cycles, some good some bad. We are aware of the needs of the customer base that we have and I also want to assure you that we did not take the decision to assume the management of these two banks lightly. We recognize that there are certain things that we can learn from them and as well as certain things that they can learn from us. And that is why we will ensure that we integrate with these institutions seamlessly so that they can bring whatever good they have to deal with their customers.”

The GCB CEO also assured that deposits of customers of both banks will not be lost following the takeover.

“We will take this opportunity to assure all depositors of the two erstwhile banks that their deposits are protected. You can go to the branches that you have used from time immemorial and you will be served,” he added.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
Follow @AlloteyGodwin

The post UT, Capital bank staff to undergo skills assessment – GCB appeared first on Citi 97.3 FM - Relevant Radio. Always.