Chief Executive Officer (CEO) of The Royal Bank (TRB), Mr Osei Asafo-Adjei has assured customers and staff of the bank that the bank is in a position to recapitalize when the Bank of Ghana (BoG) sets new limits for capitalization.
“Here at TRB, we are firmly on top of our capital situation as well as our liquidity situation,” he stated.
“This is a very sound institution, we have a very strong Board and good management and we believe that going forward we can only make good progress,”
Two local banks, UT Bank and Capital Bank had their licenses revoked by the regulator on Monday after they became insolvent beyond recovery. The two have since been taken over by GCB Bank.
The BoG said it took the action to protect depositors funds and to ensure the stability of the financial services sector.
According to the Mr Asafo-Adjei, TRB had excess liquidity and was frequently placing funds with the BoG.
He debunked reports making rounds that the bank was bankrupt, describing them as false, stressing “currently we’re nowhere near bankruptcy; we have what it takes to run the institution;
“In terms of liquidity, TRB is lending to the industry; we have more money than we need and so we are putting money into the system,” Mr Asafo-Adjei said.
Due to the general economic malaise over the last four years and the fact that banks in the country had to make substantial provisions for the mess.
“When you make provisions it affects your profits which also affect your capital so some banks had some challenges with capital but not TRB,” the CEO said.
Commenting on the plans for recapitalizing, Mr Asafo -Adjei said the bank is very aware of moves by BoG to have all banks in Ghana recapitalized.
He agreed that in principle, it is a good idea and believes a well-capitalised banking sector provides a strong back borne to the economy. He however would suggest that BoG allows banks to recapitalize based on the nature of their business interests.
“At the end of the day, the business focus of that particular Bank determines how much capital it should require,” he said.