2019 was a tough period for many financial institutions in Ghana. The sector saw a massive turn around with many businesses collapsing.
With the Bank of Ghana issuing warnings to some institutions, depositors rushed to withdraw their cash and that saw many fail to keep up and later had their licenses revoked.
According to a statement released by the central bank, it said the revocation was because the banks had become insolvent even after a reasonable period within which the Bank of Ghana had engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.
Prime News takes a look at some top financial institutions that collapsed in 2019.
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1. GN Savings and Loans Company
GN Savings and Loans Company Limited was originally incorporated as First National Savings and Loans (FNSL) Company Limited and licensed as a Savings and Loans Company. Subsequently, the financial house was issued with a universal banking license by the Bank of Ghana on September 4, 2014, and was renamed GN Bank Limited.
On January 4, 2019, the banks was reclassified from a universal bank to a Savings and Loans Company because it was not able to meet new required minimum paid-up capital of GH¢ 400 million by December 31, 2018.
The financial condition of the institution has also deteriorated since the reclassification with both negative capital adequacy ratio and negative net worth.
The in-liquid nature of the savings and loans outfit caused it to lose its operation licensing.
2. Midland Savings and Loans
Bank of Ghana (BoG) has revealed Midland Savings and Loans Company Limited registered persistent operational losses which made it difficult for it to operate.
This culminated in an adjusted negative Capital Adequacy Ratio (CAR) and negative net worth for the company as of August 31, 2018.
A Bank of Ghana (BoG) report on the company which revealed this said Midland Savings and Loans was over exposed to its related parties including Liberty Asset Management, Liberty DMI Microfinance and Griffin Financial Services which was rolled over in spite of the liquidity challenges it faced. “The institution was found to be facing liquidity challenges in January 2017.
3. Legacy capital savings and loans limited
On 12th August 2016, Legacy Capital was licensed to operate as Savings and Loans Company in Ghana by the Bank of Ghana. It, however, began actual operation in November 2016.
BoG revoked the license of Legacy Capital on the grounds of insolvency and liquidity issues.
4. Ideal Finance Ltd. Finance House
It consistently failed to meet the minimum cash reserve requirement of 10% of its total deposits.
Ideal Finance shareholders have failed to restore the bank to the required regulatory capital and liquidity levels in spite of long-standing promises that new capital was expected from foreign investors according to the BoG.
5. Legacy capital savings and loans limited
On 12th August 2016, Legacy Capital was licensed to operate as Savings and Loans Company in Ghana by the Bank of Ghana. It, however, began actual operation in November 2016.
BoG revoked the license of Legacy Capital on the grounds of insolvency and liquidity issues.
6. Alpha capital savings and loans limited
This company (Alpha Capital) begun operations in April 2015 after Bank of Ghana awarding it a savings and loans license in January same year. According to BoG, meeting depositors’ withdrawals was a significant challenge for the company. That resulted in numerous agitations and confrontations by aggrieved customers of Alpha Capital.
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Below is the list of twenty-three (23) insolvent institutions whose licenses have been revoked
The companies are:
- 1. Accent Financial Services Ltd
2. Adom Savings and Loans Ltd
3. AllTime Finance Ltd
4. Alpha Capital Savings and Loans Ltd
5. ASN Financial Services Ltd
6. CDH Savings and Loans Ltd
7. Commerz Savings and Loans Ltd
8. Crest Finance House Ltd
9. Dream Finance Company Ltd
10. Express Savings and Loans Company Ltd
11. First African Savings & Loans Company Ltd
12. First Allied Savings and Loans Co. Ltd
13. First Ghana Savings and Loans Co. Ltd
14. FirstTrust Savings and Loans Ltd
15. Global Access Savings and Loans Company Ltd
16. GN Savings and Loans Ltd
17. Ideal Finance Ltd. Finance House
18. IFS Financial Services Ltd
19. Legacy Capital Savings and Loans Ltd
20. Midland Savings and Loans Company Ltd
21. Sterling Financial Services Ltd
22. Unicredit Savings and Loans Ltd
23. Women’s World Banking Savings and Loans Co. Ltd
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