BoG revise downwards assets of UT Bank from GHS 1.3bn to GHS 437m; revises liabilities upwards
The Bank of Ghana (BoG) in its report on the inventory of assets and liabilities of UT Bank, has revised downwards the bank’s assets value by some GHS 863m.
According to the BoG in its inventory report, UT Bank’s total assets value was pegged at GHs 1.3bn as at August 14, 2017 (on the day of the bank’s license revocation), however, a preliminary asset quality assessment by the Central Bank resulted in adjustments of the asset value of the bank.
Following the adjustments made by the Central Bank, the total assets value of UT Bank is now pegged at GHS 437m.
Major adjustments made to UT Bank’s assets by the BoG were in the areas of loans and advances and balances with the BoG.
“UT Bank had Loans and Advances of approximately GHS1.2bn, accounting for approximately 88% of the Bank’s total assets as at 14 August 2017.
“A review of the loan book using industry classification standards/guidelines suggests that only GHS231m of net Loans and Advances is recoverable.
“The adjustment of GHS919m represents loans that were classified as nonperforming (loss) according to the records of UT Bank,” explained the BoG.
With regards to the bank’s liabilities, the BoG revised upwards UT Bank’s liabilities from GHS 1.86bn to GHS 2.02bn.
“Total liabilities of UT Bank were approx. GHS1.9bn as at 14 August 2017 and comprised of deposits from customers, interest payable, monies due other banks and financial institutions, deferred income, deferred tax liability and term debt.
“From our assessment and review of schedules supporting UT Bank’s liability balances, we ascertain liabilities to be approx. GHS2.0bn as shown in the adjacent table.
“Per the Management Accounts as at 14 August 2017, total deposits amount to approx. GHS1.7bn and accounts for 93% of the Bank’s total liabilities. This comprised of Customer Deposits and pre-receivership liquidity support from BoG,” remarked the BoG.
The inventory on assets and liabilities of UT Bank report by the BoG, details the assets and liabilities of UT Bank Limited as at 14 August 2017 when its licence was revoked by the Bank of Ghana.
The report was prepared for Bank of Ghana in accordance with the Joint Receivers’ reporting responsibility to Bank of Ghana under Sections 130(1), 130(4) and 126(3) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), requiring the Receiver to prepare and deliver a report on the inventory of assets and liabilities of the resolved institution.
Background
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 UT Bank Ghana Limited (“UT Bank” or ”the Bank”) due to impairment of its capital.
BoG in accordance with Section 123 (2) of the Act appointed Vish Ashiagbor and Eric Nana Nipah, both Directors of PricewaterhouseCoopers (Ghana) Limited (“PwC”) as the Joint Receivers (“JRs”) for the purposes of winding down the affairs of the Bank.
BoG approved a Purchase & Assumption (“P&A”) Agreement between the JRs and GCB Bank Limited (“GCB”) under which the JRs have transferred some assets and liabilities of UT Bank to GCB.
