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Ghana gov't takes over five distressed local banks
Last Updated: 2018-08-02 04:40 | Xinhua
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The government of Ghana has taken over five distressed local banks, merging them into a single entity, the central bank announced here on Wednesday.

The five banks include Unibank, which was put under administration earlier in Mach, and Sovereign Bank for which the central bank appointed advisors in May.

Announcing the decision, Governor of Bank of Ghana Ernest Addison said the development was part of ongoing reforms aimed at strengthening the country's financial sector to raise the capacity of local banks to withstand the vigorous competition in the financial industry.

"Bank of Ghana today has granted a universal banking license to Consolidated Bank Ghana Limited established by government. The bank of Ghana has also today revoked the licenses of Unibank Ghana Ltd, Royal Bank Ltd, Beige Bank Ltd, Sovereign Bank Ltd, and Construction Bank Ltd," Addison announced.

"To help ensure that the banking sector maintains a strong indigenous presence, the government has established a new bank called Consolidated Bank Ghana Limited which will act as a bridge bank to assume some of the assets and liabilities of the five banks," the governor added.

The new bank has thus acquired all deposits and other specified liabilities and good assets of the five banks.

The government, according to the governor, has capitalized the new bank to the tune of 400 million Ghana cedis (83.4 million U.S. dollars) and also issued a 5.7 billion cedis (1.18 billion dollars) bond to finance the gap between the assets and liabilities of the five banks.

In all, the five banks command over 2,000 employees and the governor gave the assurance that these employees would continue to work under the new bank which has been put under new management and new directors.

He said depositors' funds were safe and could still be accessed at the various branches of the collapsed banks.

This brings to seven the number of indigenous banks liquidated by the central bank since last year, with UT Bank and Capital Bank being the first casualties of the regulatory gavel, leaving 30 licensed universal banks including 12 indigenous ones.

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