UT, Capital Bank collapse; GCB to the rescue

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[dropcap]T[/dropcap]he Bank of Ghana (BoG) has given GCB Bank Ltd the green light to acquire two local banks UT and Capital bank.

A statement from the central bank and copied to Citi Business News said, ‘The Bank of Ghana has approved a Purchase and Assumption transaction with GCB Bank Ltd that transfers all deposits and selected assets of UT Bank Ltd and Capital Bank Ltd to GCB Bank Ltd’.

According to the central bank, it has also ‘revoked the Licences of UT Bank Ltd and Capital Bank Ltd. This action has become necessary due to severe impairment of their capital’.

The latest development is part of moves by government through the Bank of Ghana (BoG) to restructure the banking industry.

Citi Business News has gathered the remaining assets and liabilities of the two 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).

According to the central bank 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.

The takeover of two banks at the same time will be the first and biggest in the history of the banking industry in Ghana.
The move is to rescue the two from further challenges as both balance sheets are currently in the red.

GCB was selected 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.