Is Nduom's bank in trouble in Liberia?

UPDATE: The Central Bank of Liberia has debunked reports of bankruptcy regarding two leading commercial banks operating in the country’s capital, Monrovia.

One of the banks, known was SIB Liberia Limited, which is owned by Ghanaian businesseman, Dr. Papa Kwesi Nduom, was cited in a report published by frontpageafricaonline.com, with the caption “Broke Banks?” which prompted panic withdrawals from customers following its release.

In the rejoinder issued by Liberia’s apex bank on August 8, 2024 it described the report and claims as categorically untrue.

There are contradictions from Liberia on SIB Liberia Limited, a commercial bank owned by Ghanaian businessman and politician, Dr. Papa Kwesi Nduom.

According to a report by frontpageafricaonline.com, SIB Liberia Limited is one of two major commercial banks operating in Liberia facing insolvency issues, prompting customers to seek withdrawals.

The report indicated that Nduom’s bank is on the brink of bankruptcy after assuming liabilities totalling around US$23 million when it took over the First International Bank (FIB).

It indicated the bank was only able to pay US$14.7 million of the liabilities it inherited and relied on the Central Bank of Liberia (CBL) to pay the remaining US$8.5 million to the legacy depositors, arguing that it is the debt of the government of Liberia and the central bank.

The CBL accepted the request by Nduom’s bank, however, reports indicate that the central bank is yet to pay the liabilities owed the depositors, which has led to some of them threatening legal action against the bank.

Reacting to media reports of SIB Liberia Limited being insolvent, the central bank, in a statement issued on August 8, 2024, rejected assertions that Nduom’s bank was broke and could not pay its depositors.

It stated that the bank’s financial position is robust, with its liquidity and capital reserves above the stated requirements.

“The CBL considers these impulsive claims as not only misleading, unfounded and damaging for the existing confidence in the economy, but they are completely unsupportive of relevant financial statistics published by the CBL regarding the soundness of the banks.

“The CBL hereby informs the public that the financial position of banks remains robust, with their liquidity and capital reserves above the regulatory requirements of the CBL, implying that the banks are in full compliance with regulatory thresholds of capital and liquidity under the supervision of the CBL. Meanwhile, the CBL is very cognizant of the importance of safeguarding depositors' funds with the aim of maintaining public confidence in the banking sector,” part of the statement reads.

It added, “Whilst the CBL encourages the media to remain professional by engaging with the CBL directly for clarification and verification to balance their reporting in the interest of safeguarding the financial sector, the Bank urges the public to disregard the misinformation published by the newspaper and rely on verified and accurate sources of information. The Bank reassures the public of its commitment and transparency in support of the core objectives of price and financial sector stability”.

BAI/NOQ

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