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UT Was Riskiest Bank On Stock Exchange In 2016 – Study
 
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17-Aug-2017  
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UT Bank was found to be the most at-risk bank in Ghana listed on the stock exchange, before its collapse, in a 2016 study by Eric Dei Ofosu-Hene of the University of Ghana Business School and Peter Amoh of FinRisk Solutions.

The research (which can be found here) indicated that indigenous banks were more at risk than foreign owned banks possibly, becasuse the foreign banks adhered to stricter standards.

The objective of their study was to construct an overall risk index to ascertain risk level of banks listed on Ghana Stock Exchange (GSE) and to ascertain whether there is a significant relationship between risk management and bank performance.

Secondary data of all listed banks on GSE over the period 2007–2014 was used for the study and their findings show that banks listed on Ghana Stock Exchange have declining risk indexes on average over the latter part of the study period.

According to the researchers, this meant the Bank of Ghana (BoG) may have to impose additional prudential and regulatory requirements, i.e. regulations to mandate financial firms to control risks and hold adequate capital as defined by capital requirements. This would ensure that banks remain solvent.

“Based on the summary of risk level of GSE listed banks computed using the risk index suggested by Hannan and Hanweck (1988), it was found that, the safest GSE listed bank for period under study was SGG Societé Generale Bank. General impression is that, indigenous Ghanaian listed banks has lower risk index relative to foreign listed banks. However, the most risky GSE listed bank was UT bank,” the study noted.
 
 
 
Source: citifmonline.com
 
 

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