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Business News Mon, 24 Dec 2018

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Refinance GCB, CBG bonds - Adongo

Bolgatanga Central MP Isaac Adongo has entreated the authorities of the Bank of Ghana (BoG) to ensure that bonds raised to support the newly-constituted Consolidated Bank Ghana (CBG) Limited and GCB Bank, are used to improve the liquidity of the two banks.

The Minority lawmaker said it was important for the bonds to be converted into liquid assets to ensure the smooth running of the two state-owned banks and also to ensure that depositors have access to cash whenever they want to withdraw.

“This will immediately release GHC9billion liquidity to these banks to enable them to meet their obligations to the customers and restore confidence in the banking sector,” he told ClassFMonline.com.

It will be recalled that the government provided support through the issuance of a GHC5.76 billion bond towards the Purchase and Assumption Agreement under which the CBG was acquired.

The financial intervention was aimed at mitigating the impact of the consolidation of five local banks to ensure that all deposits are protected.

The government of Ghana, since August 2017, has rescued seven struggling local banks with GHC8billion of taxpayers’ money.

They include UT Bank, Capital Bank, uniBank, Sovereign Bank, The Royal Bank, The Beige Bank and The Construction Bank.

The first two went under in August 2017.

The other five went bust two weeks shy of a year after the first two failed.

UT Bank and Capital Bank were taken over by GCB Bank while the last five were put together by the Bank of Ghana to form the all-new CBG.

Source: classfmonline.com

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