Bank of Ghana has taken over the management of Ghanaian owned bank, UniBank as part of measures to save the local bank from imminent collapse.
In a press conference, the Governor of the Bank of Ghana, Dr. Ernest Addison said under Sections 107 and 108 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) the Bank of Ghana has effective March 20, 2018 appointed KPMG as the official administrator for UniBank Ghana Limited.
According to Dr. Ernest Addison, the new management has been sent to UniBank which means all assets and the management of uniBank will be done by the new administrator, audit firm KPMG.
A statement issued by the Secretary's Department of Bank of Ghana copied to Prime News said the decision of the Central Bank is aimed at saving UniBank from imminent collapse, and also prevent potential losses to depositors and other creditors.
Giving further reasons for the take over by Bank of Ghana, the statement reveals that UniBank has persistently maintained a capital adequacy ratio (CAR) below zero (currently negative 24%), making it technically insolvent and this contrvenes Section 29 of Act 930 which requires a minimum CAR of 10% to be maintained at all times.
"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%" the statement added.
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 it's not being closed and liquidated.
The take over comes two weeks after UniBank announced a purported takeover of Agriculture Development Bank, ADB, as some shareholders of the latter, pledged their shares in the bank.
Bank of Ghana after media reports dismissed the purported take over explaining that it has not approved any such agreement.
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