No one will be shielded - Akufo-Addo declares on collapse of 7 banks

President Nana Addo Dankwa Akufo-Addo has said that government will not shield anyone found to have played a role in the collapse of the seven local banks.

The President, speaking at the opening of the new head office complex of Standard Chartered Bank in Accra, bemoaned the cost of rescuing the seven banks to the tax payer adding that the government would ensure that not even the high-profile names behind the collapsed banks will be let off the hook when found culpable.

The Bank of Ghana and the Ministry of Finance have had to arrange for about GH¢8 billion in bonds to rescue the seven local banks which were declared insolvent and their licenses withdrawn.

UT and Capital Bank were taken over by GCB Bank in a Purchase and Assumption (P&A) arrangement approved by the central bank while deposits and some selected assets of Sovereign, Beige, Construction, Royal and Unibank were transferred to a newly created entity–the Consolidated Bank Ghana (CBG)—and an additional GHC 450million used to capitalize the CBG.

The declaration by the President follows the presentation of five dockets to the Attorney General by the Economic and Organised Crime Office (EOCO) and PwC, which was the receiver in the P&A deal involving UT and Capital Banks.

According to President Akufo-Addo, the Bank of Ghana’s decision to sanitize the financial sector was worthy of commendation, as without that the country risks being saddled with so many weak banks that could lead to loss of customers’ deposits as well as jobs.

Also speaking at the inauguration of the Stanchart Head Office, Governor of the Bank of Ghana, Dr. Ernest Addison, said the central bank’s action has resulted in a well-capitalized, and healthy financial sector.

“However, we have a few institutions in the sector that have come under stress in both banks and specialized deposit taking institutions. What are common among these institutions are unsustainable business models and poor corporate governance practices which has led to the misapplication of depositors’ funds and pushed them to the threshold of insolvency with liquidity shortages.

And, we have all been witnesses to how customers of these institutions have reacted. These developments are not a reflection of the industry. We have very strong banks and Savings and Loans that are doing well. However, we are working with the Ministry of Finance on a recovery plan which we expect to be implemented soon,” Dr. Addison noted.

Commenting on the Standard Chartered new head office building located on the Independence Avenue in Accra, President Akufo-Addo stated that: “I believe that this is the start of a new exciting chapter of growth and innovation for Standard Chartered Bank. I congratulate Board Chair, Dr. Emmanuel Oteng Kumah, Members of the Board, CEO, Mrs. Mansa Nettey and the management and staff for bringing Standard Chartered to this day. I wish them more success in the future.

According to the CEO of the Bank, Mrs. Mansa Nettey, the Head Office building is a symbol of innovation, efficiency and demonstrates the bank’s commitment to quality and sustainability.

“Not only does this building contributes to Accra’s skyline but incorporates an environmentally sustainable design to reduce our impact on the environment and protect our planet for the benefit of our communities,” she added.

The Group Chief Executive of Standard Chartered Plc, Bill Winters, who also attended the inauguration said the building represents another strategic investment to enable a pool of highly skilled talent support the bank’s ambition to be an employer of choice.