{"id":411567,"date":"2018-03-21T11:26:41","date_gmt":"2018-03-21T11:26:41","guid":{"rendered":"http:\/\/citifmonline.com\/?p=411567"},"modified":"2018-03-21T17:02:12","modified_gmt":"2018-03-21T17:02:12","slug":"banking-sector-still-strong-despite-unibank-takeover-bog","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2018\/03\/banking-sector-still-strong-despite-unibank-takeover-bog\/","title":{"rendered":"Banking sector still strong despite uniBank takeover – BoG"},"content":{"rendered":"
Despite the fact that three banks have been declared insolvent within the last eight months, with two of them totally collapsing, the Bank of Ghana (BoG) has insisted that the banking sector is in a healthy state.<\/p>\n
Commenting on the BoG\u2019s takeover of uniBank, the 2nd Deputy Governor of the Bank of Ghana, Elsie Awadzi, said the public need not fear for the collapse of more banks.<\/p>\n
[contextly_sidebar id=”ITcwxTmplDpfX8o7KCu6wei9lMFuMsFT”]\u201cThe public should remain calm. There are no problems anywhere else other than what we know about already,\u201d she stated on the Citi Breakfast Show<\/strong>.<\/p>\n
\u201cI\u2019d like to reiterate the fact that banking sector is strong, sound and safe. The public need not worry or panic. Everything is fine. We encourage everyone to be calm and continue normal banking operations with all the banks. The banks are fine.\u201d<\/p>\n
uniBank’s insolvency follows the total collapse of\u00a0UT Bank and Capital Bank in August 2017.<\/p>\n
The latter two were unable to\u00a0turn around their negative capital adequacy position, which necessitated a\u00a0Purchase and Assumption agreement allowing GCB Bank to take over all their deposit liabilities and selected assets.<\/p>\n
uniBank’s problems<\/strong><\/p>\n
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%.<\/p>\n
The Central Bank indicated that uniBank\u2019s problems were part of the legacy issues in the financial sector attributed to weak economic growth and poor corporate governance and risk management practices.<\/p>\n
Elsie Awadzi noted that though uniBank was “severely undercapitalised” it had submitted a satisfactory roadmap to get back on track, hence the BoG’s indulgence.<\/p>\n
But when it became clear the bank’s situation was getting worse, the BoG had to step in to save it from an outright collapse.<\/p>\n
Aside from all this,\u00a0uniBank had failed to comply with a directive from the BoG to stop granting new loans whilst also and deliberately concealing some liabilities from its balance sheet.<\/p>\n
Despite these failings, Elsie Awadzi said the other banks cited in the review exercise are doing fine and were under strict monitoring to prevent similar occurrences.<\/p>\n
\u201cThe other banks were fine. They all submitted their capital plans, their liquidity plans and they are all being implemented and we have no concerns with any of those. So everything is fine. We then began to put them under stronger surveillance to ensure that they were doing the right things as they had committed to do\u2026 we have checked the other banks under strong monitoring and we have no cause to believe that any other numbers were not right.\u201d<\/p>\n
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