Business News Mon, 8 Oct 2018

Bank of Ghana to takeover another troubled bank?

The Bank of Ghana has indicated that it would takeover another ‘troubled’ bank if the said institution fails to meet some conditions.

This was contained in a document cited by JoyBusiness.


JoyBusiness understands that the Bank in question (name withheld) has until the middle of this month to take crucial measures to improve its financial position or risk that regulatory action.

Some of the measures that the bank in question needs to take includes; bringing in fresh capital to help clear some huge debts on its books, as well as credible plan to even meet the old capital requirement of GH?120 million.

Another document cited JoyBusiness indicates that if this bank in question, fails to take all these measures, then the regulator stands ready to appoint an advisor to take over.

The bank is said to be insolvent and in serious financial distress.

In a previous letter to the regulator, the said ‘troubled’ bank gave details on how it plans to meet the new capital requirement and improve its financial position.

Would BoG really take over this institution?

Well, for some industry players it is still a million-dollar question. This is because the Bank of Ghana after the collapse of the five troubled banks assured that it may not allow any bank to go down.

This could imply that this bank in question could be merged with another bank or possibly the regulator could give it some liquidity support to help it stay in business.

Some say maybe the bank may secure some emergency capital from investors to avoid that action from the BoG.

Others also argue that some of these actions by the BoG are as a result of the IMF conditionality and that this takeover may happen.

The expected clean up in the financial sector would be moving to the savings and loans sector, which resulted in the Bank of Ghana announced that it would be closing down insolvent Savings and Loans Companies.

No need to panic

For some industry players, this news should not worsen or fuel the current challenge with panic withdrawals.

This is because no one has lost his or her money since the Bank of Ghana collapsed seven commercial banks earlier.

The Bank of Ghana in several instances has assured the public that it stands ready to bail out depositors’ funds.

The Governor of the Bank of Ghana, Dr Ernest Addison has indicated that about 18 banks could meet the new capital requirement of GH?400 million.

Source: Myjoyonline.com
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