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BoG Merges uniBank, Royal Bank, Beige Bank, Others Into Consolidated Bank   
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The Bank of Ghana has merged five banks into a Consolidated Bank of Ghana Limited.

The banks are BEIGE, Sovereign, Construction, UniBank and Royal Bank.

It follows the insolvency of the four banks after investigations by Bank of Ghana (BoG).

The BoG Governor, Dr Ernest Addison announced this Wednesday afternoon.

The Consolidated Bank Ghana Limited is expected to help the government in economic development.

The government has also issued a bond totaling GHc5.6 billion to cater for bad assets of the four banks, Dr Addison said. Explaining, the Governor said Unibank and Royal Bank were under capitalised and that those banks were beyond rehabilitation.

On Royal Bank, he said non performing loans were high whilst Sovereign Bank's license, he said was granted under suspicious act.

Dr Addison said the consolidated banks will be headed by Mr. Nii Amanor Dodoo of KPMG as the Receiver for the five banks.

Below is a copy of a press statement issued by the BoG on the five banks




The Bank of Ghana today has granted a universal banking licence to Consolidated Bank Ghana Limited established by the Government. The Bank of Ghana has also today revoked the licences of uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited and has appointed Mr. Nii Amanor Dodoo of KPMG as the Receiver for the five banks.

All deposits of the five banks are safe and have been transferred to the Consolidated Bank. Customers can carry out their business as usual at their respective banks which will now become branches of the Consolidated Bank. All staff of these banks will become staff of the Consolidated Bank. Boards of Directors and shareholders of these banks no longer have any roles.

Ghana needs a strong and stable banking sector to drive the process of economic transformation. A weak banking sector means that access to credit will be limited while lending rates will continue to be high.

The Bank of Ghana is mandated by law to promote the safety, soundness, and stability of the financial system and to protect the interests of depositors. In this context, the Bank has over the last year rolled out measures to strengthen the financial system to protect the interests of depositors however, a number of legacy problems have plagued the banking sector including macroeconomic factors, poor corporate governance and risk management practices, related party transactions that were not above board, regulatory non-compliance, and poor supervision, (questionable licensing processes and weak enforcement) leading to a significant build-up of vulnerabilities in the sector.

From an Asset Quality Review (AQR) of banks conducted by the Bank of Ghana in 2015 and updated in 2016, a few indigenous banks were identified as vulnerable with inadequate capital, high levels of non-performing loans, and weak corporate governance.

In August 2017, the Bank of Ghana closed two of those banks (UT Bank and Capital Bank) and approved the acquisition by GCB Bank of some of their assets and liabilities under a Purchase and Assumption Agreement. Other banks that were more recently licensed in 2016 and commenced operations in 2017 also began to show signs of distress, primarily due to conditions under which they obtained their licences.

Efforts by these banks to extricate themselves from financial difficulty have not borne fruit. The situation has rather worsened for these banks.

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.

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 GH¢3.7 billion which were neither granted through the normal credit delivery process nor reported as part of the bank’s loan portfolio. In addition, amounts totaling GH¢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. Altogether, shareholders, related and connected parties of uniBank had taken out an amount of GH¢5.3 billion from the bank, constituting 75 percent of total assets of the bank.

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