BoG’s appointment of adviser for Sovereign Bank ‘proactive’ – Analyst
A financial analyst, Toma Imihere has lauded the efforts of the Bank of Ghana (BoG) to save Sovereign Bank Limited from total collapse by appointing an adviser for the bank, describing the move as proactive.
He said the Central Bank had learnt from its past errors in the cases of the now-defunct UT and Capital Banks and the struggles of uniBank and is taking measures that will ensure Sovereign Bank does not suffer a similar fate.
Speaking on Eyewitness News on Friday, he said the bank, due to poor cooperate governance, was currently on a path to serious capital challenges hence the need for an external adviser to closely monitor its operations in order to strengthen its financial base.
“The Bank of Ghana is being proactive. It has seen the potential for it going the way of the other banks, UT, Capital Bank. Based on the way decision is made within the bank so it is making sure that the decision-making process has been strengthened by having someone from the Bank of Ghana to advise.”
“The Bank of Ghana has correctly identified poor cooperate governance as the direct cause of the problem which the banking industry is going through. You can trace that to UT bank, Capital Bank and UniBank along with several other banks to this problem.”
The Bank of Ghana on Friday announced that it had appointed an adviser for Sovereign Bank Limited to oversee its operations.
It explained in a statement that it made the appointment due to some governance and capital challenges the bank is battling with.
The adviser will among others help monitor the bank’s recapitalization efforts and implementation of governance reforms as agreed by the Bank of Ghana, while furnishing it with a status report on the bank frequently.
The adviser, unlike the official administrator, will not take over the responsibilities and duties of the bank’s shareholders’ directors and management.
‘Not exempted from the minimum capital requirement’
Meanwhile, Toma Imihere has suggested that Central Bank’s appointment of an adviser for the Sovereign Bank Limited does not exempt it from meeting the BoG’s minimum capital requirements.
While expressing uncertainty over whether the bank will be able to meet the requirements by the December 2018 deadline, he urged customers of the bank to remain calm and closely monitor the operations of the bank.