BoG Inventory Report: GHS 134.9m asset value of Heritage Bank adjusted downwards by GHS 8.4m
The Central Bank has adjusted downwards the GHS 134.9 million total assets value of defunct Heritage Bank.
Per the apex bank’s inventory report on the collapsed bank, Heritage Bank’s total assets value was revised downwards by GHS 8.4m putting the bank’s new total assets value at GHS 126.5m.
“Information provided by Management indicated that the Bank’s total assets were approx. GHS134.9m as at 4 January 2019.
“However, our initial Asset Quality Review (“AQR”) resulted in an adjustment of approx. GHS8.4m. The adjusted Asset position of approx. GHS126.5m includes asset balances assumed by CBG per the P&A Agreement,” said the BoG.
“Heritage Bank’s Liquid Assets comprise only cash and cash equivalent which amounted to approx.GHS22.8m as at 4 January 2019, this represented 17% of total assets.
“Heritage Bank’s Cash and Bank balances consist of cash held in vaults and tills, accounts maintained with BoG and other commercial banks, and cheques awaiting clearing,” added the BoG.
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Regarding the bank’s loans and advances, the BoG noted Heritage Bank’s loan portfolio consisted of term loans, staff loans and overdrafts.
“Total Gross Loans amounted to approx. GHS52.7m comprising of total loans portfolio of approx. GHS48.1m plus accrued interest receivable of GHS4.6m.
“The loan loss provision was GHS5.4m and interest suspended was GHS843k; together representing 12% of Gross loans. The gross value of the top 20 Loan Accounts amounts to GHS42.3m and accounts for approximately 79% of the total loans and advances of Heritage Bank,” it stated.
“Our Asset Quality Review using industry classification standards/guidelines suggests that an amount of approx. GHS3.4m of Heritage Bank’s loans and advances is unrecoverable and should have been added to the loan loss provision,” it added.
Commenting on the bank’s liabilities, the BoG noted total liabilities of Heritage Bank were approximately GHS67.6m as at 4 January 2019 and comprised of deposits from customers, interest payable and other liabilities and deferred tax liabilities.
“Per the Management Accounts as at 4 January 2019, total deposits amount to approx. GHS55.5m and accounts for approx. 82% of the Bank’s total liabilities. Deposit balances denominated in GBP, Euro and US dollar amounts to GHS5.0m whiles the rest relates to Ghanaian Cedi,” the bank observed.
Pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) (“the Act”), Bank of Ghana (“BoG”) on 14 August 2017 revoked the operating licence of Heritage Bank Ghana Limited due to impairment of its capital.
BoG in accordance with Section 123 (2) of the Act appointed Vish Ashiagbor, a Director of PricewaterhouseCoopers (Ghana) Limited (“PwC”) as the Receiver for the purposes of winding down the affairs of the Bank.
BoG approved a Purchase & Assumption (“P&A”) Agreement between the Receiver and Consolidated Bank Ghana Limited (“CBG”) under which the Receiver has transferred some assets and liabilities of Heritage Bank to CBG.
