The Bank of Ghana (BoG) says the forced takeover of UT Bank and Capital Bank on Monday morning is an action of last resort after the fortunes of the two banks continually deteriorated despite being on life support for two years, reports Maxwell Adombilla Akalaare.
The two banks had been on life support since 2015 and the BoG had been giving them money hoping that their condition would have improved but it didn’t.
At a press conference Monday morning, the BoG said within the two-year period, the two banks were asked to bring strategies to use to improve their condition and they brought several of them but none was credible.
At a point, the BoG said it considered a bailout but felt it would be expensive and didn’t want a situation where after a bailout the BoG would have been forced to manage the banks.
Subsequently, forceful takeover was the last resort after the other measures had been considered.
The BoG explained at the press conference that the GCB Bank is taking over only the good assets and that the bad assets will be given to the receiver, PricewaterhouseCoopers (PwC).
The GCB Bank Monday morning acquired UT Bank and Capital Bank following the distress of the two banks, the Bank of Ghana (BoG) said.
The development is in line Section 123 of the new Banking Act, which states that when a bank is in distress, the Bank of Ghana revokes their license, appoints a receiver and then look for a buyer.
This means that their licenses have been revoked and they cannot operate again.
Consequently, PricewaterhouseCoopers (PwC) has been appointed as the receiver and the GCB Bank has acquired it.
Three banks including HFC submitted bids and GCB Bank won it.
By this development, the two banks would be sealed off for four hours for the new acquirer to take over and re-open.
This means that the branches of the two banks will re-open at 1 pm on Monday August 14, 2017 and the customers will now become GCB Bank customers.
Meanwhile, the BoG has hinted of a forensic audit into UT Bank and Capital Bank operations.
The two banks didn’t know of the revoking until Monday morning.
GCB rebrands UT headquarters
Meanwhile the rebranding of UT Bank has started a few hours after the forceful takeover was announced.
At the headquarters of UT bank at Airport, the bank’s logo on the building has been replaced with that of GCB bank.
The bank flag hoisted at the premises of the head office has also been replaced with that of GCB bank.