GCB set to acquire UT bank and Capital bank

GCB bank

The 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.

Matters Arising

Customers funds & debts
Citi Business News has learnt deposits of customers of the two banks will be protected by government as the sale is finallized.
While customers who have failed to fulfill their loan payments obligations will be highly pursued.

Staff layoffs

Top level management of the two banks including the MD’s will be loose their jobs following the development.
Its unclear the fate of the other workers of the two banks, numbering close to 2,000 in total, but Citi Business News has learnt negotiations are in place to protect those who want to still work for the distressed banks.
Two top level management staff of GCB; Sam Sarpong for UT and Socrates Afram for Capital, will step in as acting MD’s in the interim.

UT Bank’s woes

UT bank’s current challenges are linked to its high non performing loans portfolio, which has greatly affected the bank’s financial performance.

The inability of the company to disclose its financials also led to a seizure of its operations temporarily by the Ghana Stock Exchange in January 2017.

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.
The company currently employs 710 persons.

As at Monday morning, the shares of UT Bank were trading at 6 pesewas.

Capital Bank

Capital bank gained a license to become a bank in August 2013.

The company had transformed from a savings and loans entity; First Capital Plus Limited since 2009.

Even though it has been fairly new in the banking industry, the managers of Capital bank have always maintained that the bank is adequately capitalised to meet the its operations at a time that reports were rife of a possible rise in the minimum capital requirements of banks.

Capital bank is headquartered at Spintex, Accra.

Its key founders are; Ato Essien, Dr Otabil as well as Rev Fritz Gerald Odonkor.

 

Credit: citibusinessnews

Average interest rate on deposits drops marginally in June

average interest drops

The average interest offered by banks on customer deposits dropped by 2.67 percent between May and June 2017. According to the latest Annual Percentage Rates (APR) and Average Interest (AI) report by the Bank of Ghana, the figure declined from 11.2 to 10.9 percent within the one month period.

Although its rate has dropped marginally, Omnibank still offers the highest interest rates on customer deposits at 17.3 percent. It is immediately followed at the 2nd and 3rd position, by Bank of Baroda and the Royal Bank with 15.4 and 14.7 percent respectively.

The 4th and 5th positions are occupied by Stanbic Bank and First Atlantic Bank, with interests on customer deposits at 14.1 and 13.8 percent respectively. They are followed by the United Bank for Africa and GN Bank which occupy the 6th and 7th positions, with their interests at 13.6 percent and 13.3 percent.

At the 8th, 9th,   10th and 11th positions are Bank of Africa, Capital Bank, Unibank, UT Bank and Zenith Bank, with interests on deposits at 13.0, 12.6, 11.6 and 11.5 percent in that order.

Also, with 11.4, 11.1, 10.9 and 10.5 percent, HFC Bank, National Investment Bank, First National Bank, FBN Bank, Prudential Bank and Sovereign Bank occupy the 12th, 13th 14th and 15th positions in that order.

Barclays Bank and Fidelity Bank occupy the 16th and 17th position with 10.4 and 10.0 percent respectively.

Furthermore, Access Bank, Societe General, and Heritage Bank take the 18th, 19th and 20th slots with interests on customer deposits at 9.8, 9.7 and 9.6 percent in that order.

Ecobank, ADB Bank, BSIC, Cal Bank and GCB Bank placed 21st, 22nd, 23rd, 24th and 25th with 9.2, 9.1, 9.0, 8.7 and 7.6 percent in that order.

Occupying the 26th and 27th positions are Guaranty Trust Bank and Standard Chartered Bank with 7.4, and 5.9 percent on customers’ deposits.

The 28th position is filled by Energy Bank with 5.7 percent interest on customers’ deposits.

In all, thirty two banks offer an average interest of 10.9 percent on customers’ deposits, according to the Bank of Ghana.

 

Credit: citibusinessnews.com