The Bank of Ghana today has announced that, it has approved a Purchase and Assumption transaction which allows two universal banks, UT Bank Ltd and Capital Bank Ltd all deposits and selected assets to be transferred to GCB Bank Ltd.
This action has become necessary due to severe impairment of the two banks capital.
In view of this, the remaining assets and liabilities of these banks will be realised and settled respectively through a receivership process to be undertaken by Messers Vish Ashiagbor and Eric Nana Nipah of PricewaterhouseCoopers (PwC).
A statement coming from the central bank and copied to thebftonline.com stated that, with immediate effect BOG had revoked the Licences of UT Bank Ltd and Capital Bank Ltd.
The latest development comes as it became clear at the just ended Ghana Economic Forum that Bank of Ghana (BoG) had begun moves to restructure the banking industry by enforcing the exist rules.
The statement further stated that, “the main offices and branches of UT Bank and Capital Bank will be under the control of GCB bank and will be opened at 1pm today for normal business transactions. Customers of UT Bank and Capital Bank are now customers of GCB bank.”
“All deposit customers will continue to have access to their funds. UT Bank and Capital Bank branches and ATMs will continue to operate as normal as GCB bank branches and ATMs. All staff in the interim will become staff of GCB bank and GCB Bank will negotiate the terms of their contract,” the statement said.
The takeover of UT Bank and Capital Bank by the GCB Bank Limited, the statement said was arrived at amongst 3 others on the basis of purchase price, cost of funding, branches to be retained, staff to be employed and impact on the acquiring bank’s capital adequacy ratio.
The Central Bank disclosed that, “GCB Bank has taken over UT Bank and Capital Bank as part of efforts to extend their reach and grow their balance sheet to position them to support large transactions in a fast-growing economy.”
Meanwhile the Bank of Ghana has assured the public that all customers can continue normal banking business at all UT Bank and Capital Bank facilities which are now branches of GCB bank and will be opened to the public by today Monday August 14, 2017 at 1pm this afternoon.
“The approval by the Bank of Ghana of this transaction is to strengthen Ghana’s banking sector, ensure financial stability and protect depositors’ funds.
The Bank of Ghana reassures customers of UT Bank and Capital Bank that their money is safe and they can continue to do business at their respective branches which are now the branches of GCB Bank,” BOG stated.
UT Bank’s woes
The Ghana Stock Exchange in January 2017 halted the trading in the shares UT Bank Limited temporarily due to the non-submission of financial results to the market.
Parts VI and VII of the GSE Listing Rules stipulate the continuing listing obligations and disclosure policy of material information for listed companies, including financial results.
The halt in trading will remain in force pending the submission of a press release by the company.
UT bank’s current challenges are linked to its high non performing loans portfolio, which has greatly affected the bank’s financial performance.
UT Bank Limited formerly known as Best Financial Services, later UT Financial Limited was incorporated on April 18, 1996 under the Companies Code, 1963 (ACT 179) as a private limited liability company.
On February 19, 1997, the Bank of Ghana formally granted the company a license to operate as a non-bank financial institution and a certificate to commence business on April 24, 1997.
UT Bank was founded by Prince Kofi Amoabeng and Joseph Nsonamoah on April 18, 1996 and is headquartered at Airport, in Accra, Ghana and currently employs 710 persons.
As at Monday morning, the shares of UT Bank were trading at 6 pesewas.
Capital bank gained a license to become a bank in August 2013 after it had transformed from a savings and loans entity; First Capital Plus Limited since 2009.
The bank is headquartered at Spintex, Accra, with the key founders being; Ato Essien, Dr Otabil as well as Rev Fritz Gerald Odonkor.