Premium Bank’s liabilities exceeded assets by GHS 561m – BoG inventory Report
Liabilities of Premium Bank exceeded its assets by some GHS 561 million, the Bank of Ghana (BoG) has noted in its inventory report on the defunct bank.
According to the apex bank, Premium Bank on a balance sheet basis was insolvent as its total liabilities was more than its total assets.
Total assets value of the Bank following adjustments made by the Central Bank, amounted to GHS 841.7 million.
Total liabilities on the other hand, amounted to GHS 1.4 billion.
“The total assets of Premium Bank were approx. GHS841.7m as at 4 January 2019. However, from our initial assessment and Asset Quality Review we have adjusted the value of Premium Bank’s Assets to GHS357.4m. This value includes asset balances assumed by CBG per the P&A Agreement,” stated the Bank.
Premium Bank’s loan portfolio, the Bank continued, consisted of term loans, staff loans and overdrafts.
Total Gross Loans amounted to approximately GHS 827.9m comprising of performing loan of approximately GHS 204.2m and past due term loans of approximately GHS623.7m.
The loan loss provision was GHS 207.3m and interest suspended was GHS 35.6m; together representing about 29% of Gross loans.
“Total liabilities of Premium Bank were approx. GHS1.4bn as at 4 January 2019 and comprised of deposits from customers, borrowed funds, expense provisions, current tax provisions and other liabilities.
“Per the Management Accounts as at 4 January 2019, total deposits amount to approx. GHS464m and accounts for 33% of the Bank’s total liabilities,” the Bank observed.
“Premium Bank reported Borrowed Funds of approximately GHS 925m accounting for over 65% of total liabilities as at 4 January 2019. This balance constituted mainly investments from other financial institutions and companies,” it added.
Pursuant to Sections 16 (1)(a), 16 (7) and 16 (8), as well as Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), Bank of Ghana on 4 January 2019 revoked the operating licence of Premium Bank Ghana Limited on the basis that it was insolvent on a Balance Sheet basis.
BoG in accordance with Section 123 (2) 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 also approved a Purchase & Assumption Agreement between the Receiver and Consolidated Bank Ghana Limited under which the Receiver transferred selected assets and liabilities of Premium Bank to CBG.