Government has been able to recover a total amount of Ghs 1.7 billion from the total assets value of over Ghs 25 billion of banks collapsed during the government’s banking sector clean-up exercise.
Making the disclosure at the press briefing of the 100th Monetary Policy Committee (MPC) meeting, Governor of the Central, Dr Ernest Addison, averred government’s inability to recover the entire Ghs 25 billion or a significant part of it, is due to the ongoing litigations at the court of law involving the collapsed banks.
“”Some Ghs 1.7 billion has so far been recovered from the total assets of the banks which is in the region of Ghs 25 billion, and that represents 7 percent of the total amount that needs to be recovered,” stated Governor Addison.
“Part of the problem for government is due to the ongoing court cases, things are not going as fast as we would want them to,” he added.
Government in August 2017 embarked on a clean-up exercise of the financial sector which led to the collapse of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, two non-bank financial institutions, and most recently the revocation of the licences of 53 Fund Management Companies.
Receivership process of the collapsed 9 banks was initiated by the Central Bank. Commercial banks collapsed in the sector clean-up included; UniBank, Royal Bank, Beige Bank, Sovereign Bank, Construction bank, to name a few.
Following the clean-up exercise, the Central Bank has noted that the clean-up exercise has culminated in a stable financial sector with fewer banks and specialised deposit-taking institutions (SDIs) which are well-capitalised, liquid, solvent and able to better support the nation’s economic growth agenda.
“If you talk about liquidity which is one key measure of bank performance and across other measures such as asset quality, profitability, and other ratios, the banks are indeed much stronger than they were before the clean up. The banks in the country are now able to pay off their liabilities as and when they fall due,” noted Second Deputy Governor of the Central Bank, Elsie Awadzi Addo in an interview earlier this year.
Currently combined assets of banks in the country amount to Ghs 155.7 billion, up from the Ghs 89 billion recorded prior to the sector clean-up exercise in 2017. Deposits have also increased to Ghs 104.9 billion in April 2021, up from the Ghs 55.7 billion recorded prior to the clean-up exercise.
Government in its bid to restore confidence in the financial sector and protect savings of Ghanaians running into millions of cedis, is reported to have spent in excess of Ghs 21 billion in refunds of monies to customers of the collapsed banks, FMCs and other financial institutions.
