uniBank beyond saving as shareholders illegally disburse GHC5.3bn – BoG
An Asset Quality Review (APR) of uniBank has revealed that unscrupulous activities of shareholders, related and connected parties contributed to the bank’s woes.
According to the Governor of the Bank of Ghana (BoG), these persons had taken out a total of ¢5.3 billion from the bank without recourse to due process.
At a press briefing to announce the consolidation of the bank and four others, Dr Ernest Addison gave a breakdown of the situation that led to the collapse of the bank.
He said “The Official Administrator appointed for uniBank in March 2018 has found that the bank is beyond rehabilitation. Shareholders, related and connected parties had taken amounts totaling ¢3.7 billion which were neither granted through the normal credit delivery process nor reported as part of the bank’s loan portfolio.
Dr Addison made the revelations during a press conference in Accra on Wednesday
“In addition, amounts totaling ¢1.6 billion had been granted to shareholders, related and connected parties in the form of loans and advances without due process and in breach of relevant provisions of Act 930,” he continued.
The amount constitutes 75 percent of the total assets of the bank, the Governor said.
Government announced the takeover of uniBank in March this year due to what was described as liquidity challenges.
Announcing the takeover, the Governor of the Bank of Ghana Dr. Ernest Addison, said uniBank is currently insolvent.
He also announced the appointment of audit firm KPMG to, over for a period of six months to manage the bank to save it from collapse.
But with just two months for KPMG to conclude its work, the BoG has announced the merger of the bank and four others - Sovereign Bank, Royal Bank, Beige Capital, Construction Bank - into Consolidated Bank Ghana Limited.
Dr Addison attributed the decision to merge the bank to liquidity challenges.
He further revealed that uniBank and Royal Bank were identified during the AQR update in 2016 exercise to be significantly undercapitalized.
“The two banks subsequently submitted capital restoration plans to the Bank of Ghana, These plans, however, yielded no success in returning the banks to solvency and compliance with prudential requirements,” he added.