According to the central bank, it took the decision to save uniBank from collapse.

Here are the 10 major reasons why the central bank took over uniBank.

1. uniBank persistently maintained a capital adequacy (CAR) ratio below zero (currently negative 24%), making it technically insolvent. This contravened the 10% minimum CAR required.

2. uniBank suffered liquidity shortfalls and consistently breached its cash reserve requirement. As a result, UniBank relied extensively on liquidity support of over GHS 2.2 billion from the Bank of Ghana over the past two years to meet its recurring liabilities.

3. uniBank conducted its credit administration in a manner that has jeopardized the interests of depositors and the financial sector as a whole.

4. uniBank failed to comply with a directive of the Bank of Ghana dated 26th October, 2017, under section 105 of Act 930, prohibiting the bank from granting new loans and incurring new capital expenditures.

5.uniBank failed to comply with several other regulatory requirements, including  Lending to a number of borrowers in excess of its regulatory lending limit (single obligor limit).

6. uniBank was borrowing from the inter-bank market without the written approval of the Bank of Ghana when its CAR was less than the prescribed ten percent (10%), in breach of the BoG laws.

7. uniBank was outsourcing a number of services such as those of tellers, receptionists, and security, to affiliate companies without the prior approval by the Bank of Ghana, contrary to BoG Laws.

8. uniBank refused to cooperate with the Bank of Ghana in the performance of its supervisory responsibilities, including deliberately concealing some liabilities from its balance sheet, and failing to submit documents and records for supervisory inspection.

9. uniBank was engaged in poor corporate governance and risk management practices which rendered the bank vulnerable to macroeconomic shocks.

10. uniBank was generally conducting its affairs in a manner detrimental to the interests of depositors and the financial system as a whole.

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By: Lawrence Segbefia/citibusinessnews.com/Ghana

The post Here are 10 reasons why BoG took over uniBank appeared first on Citi 97.3 FM - Relevant Radio. Always.

This means that the central bank has taken over the assets and management of uniBank.

[contextly_sidebar id=”UqhOajNahE2Mi6N48T37jhpju9I1GgpS”]The Governor of the Bank of Ghana, Dr. Ernest Addison, says uniBank is currently insolvent.

Addressing a press conference in Accra, Dr. Ernest Addison stated that, KPMG has been appointed to manage the bank to save it from collapse.

Citi Business News’ Lawrence Segbefia reports that the central bank has ordered the management of uniBank to step aside and allow the new entity, KPMG assume the management of the bank.

He also added that, the central bank had indicated that uniBank’s capital has not been close to the 400 million cedis minimum requirement expected of commercial banks by December 2018.

The announcement comes two weeks after uniBank announced a purported takeover of adb after some shareholders of the latter, pledged their shares in the bank.

The BoG at the time, dismissed the reports explaining that it has not approved any such agreement.

The CEO of uniBank, Dr. Kwabena Duffour Junior told Citi Business News that uniBank is set to assume a controlling interest in ADB after a consortium of shareholders pledged their shares, proceeds, entitlement and voting rights to Unibank.

Below is the full statement from BoG announcing the takeover

BANK OF GHANA APPOINTS OFFICIAL ADMINISTRATOR FOR UNIBANK GH LTD

Accra, Ghana, March 20, 2018- In exercise of its powers under Sections 107 and 108 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) the Bank of Ghana has, effective today 20th March 2018, appointed KPMG as Official Administrator for UniBank Ghana Limited (UniBank).

Section 107 of Act 930 empowers the Bank of Ghana to appoint an Official Administrator to take official control of a bank when its capital adequacy ratio (CAR) has fallen below 50% of the required minimum of 10% (i.e. below 5%). Under section 108 of Act 930, the Official Administrator is authorized to exercise a variety of powers to rehabilitate and return the bank to regulatory compliance within a period of six months, at the end of which the bank will be returned to private ownership and management.

The appointment by the Bank of Ghana of the official administrator is aimed at saving UniBank from imminent collapse. It will prevent potential losses to depositors and other creditors, and ensure that the financial condition of the bank does not create further risks for the entire financial system.

KPMG as Official Administrator will assume control of the bank and all its branches and carry out the responsibilities of the shareholders, directors, and key management personnel of UniBank with effect from today. In line with its powers under Act 930, KPMG will ascertain the state of the bank’s assets and liabilities, and exercise a variety of powers under Act 930 to rehabilitate and return the bank to regulatory compliance and viability within a period of six months, at the end of which the bank will be returned to private ownership and management.

During the period of official administration of UniBank, the bank will remain open for business under the management and control of KPMG overseen by the Bank of Ghana, and is not being closed and liquidated.

UniBank’s problems are part of the legacy issues in the financial sector attributed to weak economic growth and poor corporate governance and risk management practices.

It will be recalled that UniBank was one of nine banks identified after the asset quality review exercise undertaken in 2016, to be significantly undercapitalized with a CAR of 4.75%.

As part of efforts to recapitalize the bank, it submitted capital restoration plans to the Bank of Ghana which it implemented to build up its capital to 7.7% in August 2017. Subsequent reviews of UniBank’s books by Bank of Ghana’s supervision teams showed that the bank had not reported the state of its loan book accurately.

Consequently, by October 2017, its CAR was estimated at negative 12.5 %, making it technically insolvent. By December 2017, its CAR had dropped further to negative 24%.

The bank has failed to submit its monthly returns to the Bank of Ghana for January and February 2018, and as a result Bank of Ghana has no evidence to suggest that its CAR has been restored to the regulatory minimum of 10%.

Efforts made by Bank of Ghana’s supervisory teams who have visited the bank’s head office several times this month to obtain current information on the bank’s financial health, proved futile as the bank’s management failed to cooperate with the Bank of Ghana staff on site.

The appointment of the Official Administrator has therefore become necessary due to the fact that uniBank has, among other things:

a) Persistently maintained a capital adequacy ratio (CAR) below zero (currently negative 24%), making it technically insolvent. This contravenes section 29 of Act 930 which requires a minimum CAR of 10% to be maintained at all times.

b) Persistently suffered liquidity shortfalls and consistently breached its cash reserve requirement. As a result, UniBank has relied extensively on liquidity support (over GHS 2.2 billion) from the Bank of Ghana over the past two years to meet its recurring liabilities. Among other things, a key shareholder of the bank managed to obtain liquidity support from the Bank of Ghana using third party banks as its agents. The Bank of Ghana’s exposure to the bank was therefore underestimated by nearly GHS 400 million, as this amount was not reflected in its books.

c) Conducted its credit administration in a manner that has jeopardized the interests of depositors and the financial sector as a whole.

d) Failed to comply with a directive of the Bank of Ghana dated 26th October, 2017 under section 105 of Act 930, prohibiting the bank from granting new loans and incurring new capital expenditures.

e) Failed to comply with several other regulatory requirements, including:

Lending to a number of borrowers in excess of its regulatory lending limit (single obligor limit) under section 62 of the Banks and SDIs Act, 2016 (Act 930);

Borrowing from the inter-bank market without the written approval of the Bank of Ghana when its CAR was less than the prescribed ten percent (10%), in breach of section 66(1) of Act 930.

Outsourcing a number of services such as those of tellers, receptionists, and security, to affiliate companies without the prior approval by the Bank of Ghana, contrary to section 60 (12) of Act 930.

Refusing to cooperate with the Bank of Ghana in the performance of its supervisory responsibilities, including deliberately concealing some liabilities from its balance sheet, and failing to submit documents and records for supervisory inspection.

Poor corporate governance and risk management practices which rendered the bank vulnerable to macroeconomic shocks.

Generally conducting its affairs in a manner detrimental to the interests of depositors and the financial system as a whole.

In spite of the Ministry of Finance recently agreeing to absorb a significant amount of the debts of Government contractors owed to the bank to the tune of ¢428,817,961 (backed by Interim Payment Certificates issued to contractors), the bank has not been able to address its capital deficiency, which has continued to deteriorate.

Also, the bank engaged in significant transactions with its parent company and affiliate companies including connected lending and other related party transactions without sufficient controls as required by law.

Allowing the continuation of UniBank’s activities in their current form would be detrimental to the interests of depositors and the banking system as a whole.

Several attempts by the Bank of Ghana to work together with management and shareholders of the bank to address the capital deficiency and liquidity challenges have failed to achieve the desired outcome, making the continuous reliance on Bank of Ghana for liquidity support unsustainable.

More recently, the bank’s announcement of a purported pledge of ADB Bank shares in its favour by its shareholders to secure commitments for recapitalization, were deemed by the Bank of Ghana to be null and void as no prior approval had been obtained from the Bank of Ghana as required by Act 930 for acquiring significant shares in a bank or exercising other forms of control by virtue of any transaction.

In any event, a request by the Bank of Ghana to the bank to submit copies of the Deed of Pledge and underlying transactional documents were not heeded by uniBank, its shareholders, directors, or management.

Furthermore, there are additional regulatory hurdles outside the control of the Bank of Ghana required to be cleared by UniBank before potentially realizing any value, if at all, from the said transaction, making it incapable of addressing the immediate capital and liquidity needs of the bank.

The Bank of Ghana takes this opportunity to reassure customers of UniBank that all deposits they have with UniBank are, and will remain, safe and that they can continue to do business at any of its branches. NO DEPOSITOR OF THE BANK WILL LOSE ANY MONEY.

Bank of Ghana remains committed to supporting the orderly development of Ghana’s banking sector including indigenous Ghanaian banks, while promoting a strong and resilient sector to drive Ghana’s economic growth.

Kindly direct any questions to Bank of Ghana. You may call telephone number 0302665034 or send email to [email protected].

Issued

By: Secretary’s Department.

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By: Lawrence Segbefia/Pius Amihere Eduku/citibusinessnews.com/Ghana

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[contextly_sidebar id=”sQEwuo1LcKcAfi83ysNsERs3BcAx31O8″]Following the revocation of the licenses of the two banks, concerns have been raised on the takeover without the consent of its shareholders.

Speaking at a press conference in Accra, the Managing Director of GCB Ronald Sowah however said due diligence was followed in the acquisition of the two banks.

“When did the GCB come in?I must say that is a privileged information. I cannot disclose that to you. If you were at the Bank of Ghana press conference, they indicated the sensitivity of the matter and therefore everything had to be hush-hush because they were concerned about certain things going wrong. Now we have a lot of respected shareholders. We could not say that we are going to conduct an AGM or EGM to ask this question. This is something that we can deal with post assumption.”

UT Bank, Capital Bank employees to undergo skills assessment 

Reacting to concerns on the new staff of the bank, Mr Sowah gave the assurance that the necessary process will be followed in laying off some of the workers.

He said employees will undergo skills assessment to qualify for employment at GCB Bank.

“…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 explained.

Why the takeover?

GCB was authorized to take over the two banks because according to the Central Bank, they had “severe impairment of their capital.”

The collapsed banks were also “unable to develop an acceptable plan”, according to the Central Bank 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.

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

The post UT Bank, Capital Bank takeover: We followed due process – GCB Bank appeared first on Citi 97.3 FM - Relevant Radio. Always.

The five are 25-year old Musah Muship and Abdulai Mohammed aged 41. The rest are 32-year old Issahaku Sulemana, Adam Mahama 39, and Sulemana Issahaku 32. They are all scrap dealers operating in Accra.

According to the Regional Police Public Relations Officer, ASP Effia Tenge “the suspects allegedly seized toll tickets, assaulted the Accra Metropolitan Assemble Revenue Collectors and [also] collected cash to the sum of two thousand Ghana cedis from them.”

She was emphatic that the offence would be immediately investigated and the suspects prosecuted.

Youth allegedly involved with ‘takeovers’ arrested

The Police have also arrested some persons believed to have been part of the forceful takeover of certain state agencies following the declaration of President Akufo-Addo as winner of the December 7 elections.

These youth are largely believed to be members of the New Patriotic Party (NPP).

Amasaman/Trobu

The Divisional Police Command also arrested the New Patriotic Party (NPP)’s Trobu Constituency Chairman Kwame Ofosu Agyei, for forceful entry and assault.

According to a statement signed by Regional Commander, ACP Timothy Y Bonga, he was arrested “for forcibly entering the Doblo Toll Booth and threatening to take over the revenue collection operations, and in the process assaulted the police officer who was then on duty.”

Mr. Kwame Ofosu Agyei is subsequently being processed for court.

Nima

The Divisional Police Command has arrested three other people for similarly taking over three toilet facilities within Mamobi.

The Police Command says it is poised to clamp down on all such unlawful acts.

“The Regional Police Command will treat such persons as criminal elements”.

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By: Anas Seidu/citifmonlne.com/Ghana

The post 5 arrested for seizing AMA tolls, assaulting collector appeared first on Citi 97.3 FM - Relevant Radio. Always.