uniBank Takeover: BoG Rules Out New Negotiation with Old Management

The Bank of Ghana has ruled out any plans to negotiate with the old management of uniBank, to hand over the bank, before KPMG completes its six months’ mandate.

The BOG, believes the old management of uniBank was given enough opportunities to turn the fortunes of the bank around but failed.

The Bank of Ghana last week appointed an administrator to take over uniBank after the bank faced liquidity challenges and breached many of the regulator’s provisions.

Speaking to the media on Monday, March 26, 2018, Governor of the Bank of Ghana Dr. Ernest Addison stated that the period for engagement with uniBank is over.

“In terms of whether we’re in negotiation with uniBank, there’s nothing to negotiate. We’ve been in discussions with the bank for more than six months now. So the decision that we took was on the basis of full information on the state of the bank.”

The Bank of Ghana (BoG) announced the decision to take over the management of uniBank, by appointing an administrator, KPMG on Tuesday March 20, 2018.

According to the central bank, it took the decision to save uniBank from collapse. Key among the reasons given include but not limited to the fact that uniBank persistently maintained a capital adequacy (CAR) ratio below zero (currently negative 24%), making it technically insolvent. This contravened the 10% minimum CAR required.

The Governor meanwhile stated that the Central Bank was hopeful of receiving payments after PriceWaterHouse Coopers (PWC) completes its receivership job on UT and Capital Bank.

“In the case of both UT and Capital Banks, the Central Bank spent money to try to keep them running for a while, for at least a year and a half before we pulled the plug. So that’s a cost to the central bank. PWC is still carrying out the receivership process. At the end of the receivership we will know what the cost of that process is. Depending on the assets that the receiver is able to realize, the Bank of Ghana and government will get paid, I’m not sure about the shareholders.”

Seven months after the central bank closed down UT Bank and Capital Bank it is yet to make public its findings.

The Bank of Ghana (BoG) has however stated that it is finalizing a report that will explain the causes of the collapse of the two banks.

The central bank closed down UT Bank and Capital Bank in August 2017 to protect the banking system from collapsing due to the distress nature of the two banks.

The BoG at the time assured that it will come out with comprehensive reasons for the collapse to guide banks in the future.