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Simon Dornoo leads team to revive uniBank

A former Managing Director of the GCB Bank, Mr Simon Dornoo, is to lead a team of experts from accounting and auditing firm, KPMG to revive and stabilise uniBank Ghana Limited.

The revival is to help bring the bank, which was declared insolvent by the Bank of Ghana on March 20, “back to regulatory compliance.”

KPM, the official administrator of the troubled uniBank, said in a press statement that Mr Dornoo had been engaged as an executive representative to lead “the management team to stabilise and bring the bank back to regulatory compliance.”

He will act in that capacity over the next six months, within which he and the team will be expected to audit the operations of the bank and recommend a way forward for the central bank.

Mr Dornoo, an experienced banker with 25 years in service, resigned from GCB Bank in March 2016.

He then returned to KPMG, where he started his professional career in 1985, as a consultant to the Ghana unit of the multinational firm.

In his current position, he is expected to bring to bear his decades of professional expertise in banking and accounting to help establish the root cause of the bank’s predicaments and initiate measures to reverse its fortunes.

Beyond GCB, where he was MD for six years, Mr Dornoo has also worked with Barclays Bank Ghana and CAL Bank Limited.

uniBank, a wholly indigenous lender, was put under administration on March 20 with KPMG as the official administrators.

It was the anticlimax of two years of difficulties, culminating in capital adequacy ratio of negative 24.92 per cent compared to eh regulatory requirement of not less than 10 per cent, a reserve ratio of one per cent and a heavy exposure to BoG to the tune of GH¢2.2 billion.

In spite of being under administration, the bank’s branches are opened for business but under the guidance and management of the Simon Dornoo-led team from KPMG.

 

Source: myjoyonline

Ghana’s debt hits GH¢142.5bn, reaches 69.8% of GDP

New figures released by the Bank of Ghana (BoG) after its Monetary Policy Committee (MPC) meeting show that Ghana’s public debt reached 142.5 billion cedis as at December 2017, representing 69.8 percent of GDP.

This is a reduction from the 73.3 percent recorded in December 2016.

The total debt stock in 2016 was at 122.6 billion cedis.

This means that the debt stock has almost hit the dreaded 70 percent of GDP, a point the International Monetary Fund (IMF) has constantly cautioned against.

The data shows that in September 2017, Ghana’s debt stood at 138.9 billion cedis representing 68.1%; the figure dropped to 137.6 billion cedis in October representing 67.4%.

But in November 2017, it went up to 139 billion cedis representing 68.1 percent.

The domestic component of debt as at December 2017 stood at 66.7 billion cedis, while the foreign debt stock was at 75.8 billion cedis.

Export Earnings

In the first two months of the year, export earnings by February 2018, reached 2.8 billion dollars.

Gold raked in a little over 1 billion dollars, while cocoa fetched cocoa 650 million dollars. Earnings from oil export also reached 664 million dollars.

On the import side, Ghana spent 2.2 billion on imports.

Banking Sector 

In the banking sector, Total Advances of banks saw a drop this year from 38.5 billion cedis in January to 35.8 billion cedis in February. Also, Banks Total Asset stood at 95.1 billion cedis, same as January this year.

By: Lawrence Segbefia/citibusinessnews.com/Ghana

Unibank: BoG stepped in at the right time – Finance Minister

Finance Minister Ken Ofori-Atta says he fully supports Bank of Ghana’s (BoG) decision to take over the management of the indigenous private bank, Unibank.

The Central Bank last week appointed accounting firm KPMG to manage Unibank after it emerged that the bank was on the verge of collapsing and has breached many regulatory requirements.

The Finance Minister tells Joy Business any action that is aimed at strengthening the banking sector should be welcomed.

“The Bank of Ghana has stepped in at the right time to make sure that depositors’ monies are safe. And that is fundamental to any economy to strengthen it,” he said.

Unibank becomes the third indigenous bank to face the wrath of the regulator after Capital Bank and UT Bank went under in a shocking takeover announced by the BoG late last year.

The state-owned bank, Ghana Commercial Bank was announced as the new owners of UT and Capital Banks, a measure the central bank believed will save the banking industry from collapse.

Speaking to Joy Business, Ken Ofori-Atta said: “the Bank of Ghana will continue to show prudence and make sure that the banking system is strengthened.”

He adds, “for us as a government there is also the need to ensure that we have a strong indigenous banking sector and so we are thinking through ways to ensure that the representation in the banking landscape has strong Ghanaian representation.”

The Finance Minister also added that he supports moves to go after the directors of the defunct banks UT and Capital.

 

Source: myjoyonline

Ailing Microfinance firms owe 700,000 depositors GHȼ740m – BoG

The Bank of Ghana (BoG) has revealed that 37 percent of licensed Micro Finance Institutions that entered 2018 are distressed or have collapsed.

This has contributed to the GHȼ740.5 million which is owed to an estimated 705,396 depositors in distressed or folded up Micro Finance Institutions (MFIs)  and Rural and Community Banks (RCBs) among others.

The BoG governor in a statement warned that the problems in the financial sector are not restricted to just banking, following the insolvency of uniBank and the 2017 collapse of UT Bank and Capital Bank.

According to the BoG, the distress in this sub-sector has been characterized by “severely impaired capital; inability to meet regulatory capital adequacy requirement; generally low asset quality; and liquidity crises.”

“These have culminated in threats to depositors’ funds thus eroding public confidence and undermining efforts to promote financial inclusion,” the statement added.

Using figures to highlight the precarious situation in the financial sector, the BoG said of the total number of 566 licensed Micro Finance Institutions in 2018, 211 are active but distressed or have folded up.

Also, out of the total number of 141 rural and community banks, 37 are active but distressed or folded up.

“In total, it is estimated that 272 out of the 707 institutions in the sub-sector, representing 38.5% are at risk.This indicates that approximately GHȼ740.5 million is owed to an estimated 705,396 depositors of the distressed or folded up MFIs and RCBs. In terms of significance, the deposits under distress form 8.81% and 52.49% of industry total deposits of RCBs and MFIs respectively.”

Sanitising Microfinance sub-sector 

Earlier in March, the BoG said it was to outline new reforms to sanitize Ghana’s microfinance industry.

The reforms are expected to among other things provide a comprehensive plan by the central bank to improve activities in the microfinance industry.

It also comes on the back of reports of customers losing their investments to some microfinance institutions when their operations have been suspended over inefficiencies.

In a publication, the BoG said there were 319 microfinance institutions.

A further breakdown showed that there were 40 money lending institutions, six  Financial NGOs as well as two hundred and seventy-three (273) microfinance institutions.

The central bank has said it will not issue any license this year for microfinance institutions.

By: Delali Adogla-Bessa/citifmonline.com/Ghana

 

uniBank takes over ADB

In an unexpected move that could be the beginning of a restructuring of the local banking space, a consortium of financial institutions that control majority shares in agric-focused bank, Agricultural Development Bank (ADB), have pledged their shares, proceeds, entitlement and voting rights to uniBank, a leading local bank.

The consortium, led by Belstar Capital–a turnkey project finance and implementation institution–also includes Starmount Development Company Limited, EDC Investments Limited and SIC-FSL.

These institutions took up a substantial stake in ADB’s Initial Public Offering (IPO) in 2016 that paved the way for the bank to go public.

A source close to the deal has confirmed to the B&FT that the shares pledged to uniBank, which totals 51 percent, means uniBank now holds a controlling stake in ADB and with the additional majority voting rights, can now determine the strategic direction of ADB.

Dr. Kwabena Duffuor II (Chief Executive Officer)

Despite the pledge of shares and voting rights, this does not constitute an outright sale, and therefore does not contravene any rules and regulations of industry regulators, including the Securities and Exchange Commission (SEC), Bank of Ghana (BoG) and the Ghana Stock Exchange (GSE).

“What this means is that the shares have been pledged to uniBank and are now under the bank’s [uniBank] control. ADB, by this, remains in local hands to help drive the growth of the Ghanaian economy,’’ the source said.

In December, 2017, the B&FT reported that uniBank had secured over GH¢600million in fresh capital injection from Belstar Capital to position itself as one of the earliest banks to meet the Central Bank’s increased stated capital requirement.

“The proceeds and entitlement attached to the shares includes, but is not limited to, the voting rights at any general or extraordinary meetings and any future dividends that may accrue to those shares,” the source told the paper

ADB has been on a path of recovery for the past two years since it went public. After recording losses of GH¢78million and GH¢70million in 2015 and 2016 respectively, ADB posted a healthy and very impressive after tax profit of GH¢50million for its third quarter 2017 results. “It would appear then that management and the board of ADB are working assiduously to unlock the huge potential of ADB,” the source noted.

What happens to ADB/NIB merger?

The Finance Minister, Ken Ofori-Atta, in November last year, confirmed that government is working to merge ADB and National Investment Bank (NIB) in the creation of a new National Development Bank that will focus on financing industrialisation and agriculture.

“The thinking process is clear that we need a strong and vibrant and well-capitalised enterprise development bank. This is to be able to support the Agriculture and industrialisation drive,” the Finance Minister said.

With uniBank’s control of the shareholding of ADB, this could bring an abrupt end to government’s plan for the merger.

 

Source: B&FT

Ghana sells 1.99 bn cedis worth of 5-year local bonds at 16.5%

Ghana sold 1.99 billion cedis ($448 million) worth of a fresh five-year domestic bond on Thursday and the major commodity exporter will pay a yield of 16.5 percent, joint transaction arrangers said.

Initial guidance for the bond, open to non-resident Ghanaians, was in the range of 15 percent to 16.5 percent. Total bids tendered for the paper were 2.01 billion cedis.

The government plans to issue a total of 11.13 billion cedis in the first three months of this year of which 8.96 million cedis are rollovers to restructure maturing debt.

Ghana, which exports cocoa, gold and oil, is in its final year of a $918 million credit deal with the International Monetary Fund to reduce deficits, inflation and public debt which hit 70 percent of GDP last year.

Settlement of Thursday’s bond which matures in 2023, is on Monday, said co-bookrunners Barclays Bank Ghana. The others are Stanbic Ghana, Fidelity Bank, Databank and brokerage firm ICsecurities.

 

Source: Reuters

BEIGE begins nationwide campaign to reverse poor pension planning culture

Finance powerhouse, BEIGE, has launched a tier-3 personal pension scheme aimed at securing financial independence for subscribers during retirement.

The ‘EveryDayPension’ retirement plan allows subscribers to save at least GHȻ50 a month to enable them to secure comfortable financial future.

Speaking at a forum Thursday before the launch of the scheme at the Holiday Inn in Accra, Director of Planning, Research, Monitoring and Evaluation at the National Pensions Regulatory Authority (NPRA), Ernest Amartey-Vondee, said due to a lack of proper pensions planning, many Ghanaians receive very meagre pensions during retirement.

Quoting recent figures from the Social Security and National Insurant Trust (SSNIT), Mr Amartey-Vondee revealed that more than half of the total number of people on pensions receive less than GHȻ500 a month from SSNIT because of poor planning.

He revealed further that as at December 2017, some 189, 549 people are on pensions and out of this number 110, 292 (58.2%) receive less than GHȻ500.

Also, only 17,365 people on pension currently receive GHȻ1,000 a month, meaning that 86.25% of Ghanaians receive pensions less than GHȻ 1,000.

Beige pensions forum

He said the figures show a poor pensions planning culture among Ghanaians.

According to him, because during retirement the expenses of retirees are likely to be higher, there was a need to reverse the trend and ensure that workers in both the formal and informal and informal sector actively work towards a comfortable retirement.

In response to the poor retirement planning among the majority of Ghanaians, BEIGE has begun a nationwide campaign to highlight the need for financial independence during retirement.

The campaign, according to Managing Director of Beige Pensions Trust, Richard Kwame Frimpong, will target Ghanaians in both the formal and informal sectors.

The BEIGE Group, firmed up its pensions arsenal when it acquired Universal Pensions Master Trust (UPMT), a licensed corporate trustee in 2017 – bringing to two the number of corporate trustees it acquired.

BEIGE’s first acquisition of a corporate trustee firm was in 2014 and the acquired firm was Legacy Pension Trust (LPT).

The transactions are key steps in BEIGE’s strategy to affirm its status and capacity to serve as a provider of a broad range of financial services.

Board Chair of The Beige Bank, Kofi Otutu Adu Larbi, also called for consistency in the payment towards pensions plans by persons already subscribed to a scheme.

“The money that you earn today, however little, is a seed for tomorrow’s harvest,” he advised the delegates at the well-attended forum.

The delegates, drawn from both the formal and informal sectors, are partners of The Beige Group.

Prof Stephen Adei, Board Chair of The Beige Group, lauded the launch of the EveryDay Pensions scheme and the nationwide campaign.

As part of the campaign, Beige Pensions will visit target locations to offer free advice on pension planning, banking, insurance and investment.

“The pension scheme is also very good for our country. All the countries that have made it have had a source of stable long-term capital and the pensions funds are the drivers of successful economies,” Prof Adei said.

 

Source: myjoyonline

Large organisations can now receive instant electronic payments

Large corporate organisations and public-sector institutions can receive instant payment electronically if they sign onto the e-bills pay system introduced by the Ghana Interbank Payment and Settlement System (GhIPSS).

This should address payment challenges and improve efficiency at these organisations.

The e-bills pay system is targetted at large organisations such as manufacturers which deal with wholesalers and retailers. It can also be used by airlines and big hotels to receive payments from customers. It is also suitable for public sector institutions which receive taxes, levies and fees.

The e-bills pay is the latest initiative by the national payment infrastructure provider as it seeks to modernise payments in Ghana in line with best practices globally.

The e-bills pay runs on the back of the Instant Pay system and will enable customers of large corporate organisations to pay for goods and services electronically so the money will be received by the companies instantly. It eliminates the issuance of cheques and delay associated with the days that cheques take to clear. It also eliminates the cumbersome processes involved in sorting out cheques from thousands of customers.

Speaking in an interview, Mr. Archie Hesse, the Chief Executive Officer of GhIPSS, said the e-bills pay will introduce efficiency in how large corporate organisations handle their payments while making business expedient for the customer as well. He explained that since the e-bills pay is instant, the situation wherein customers or wholesalers and retailers have to wait for their cheques to clear or payments to go through before receiving their consignment of goods no longer exists because the payment is immediate.

e-bills payment is electronic and can be accessed via mobile applications or Internet banking, which means customers will not need to be physically present to make payments but can do so from the comfort of their offices, homes or wherever they find themselves.

Mr. Hesse is hopeful that e-bills pay will address a lot of payment anomalies and reconciliation challenges that large organisations face in dealing with a large number of customers.

The initiative is one of the key projects that GhIPSS has set out to drive this year. Mr. Hesse said GhIPSS has already signed on some airlines and public-sector institutions and is in talks with some others to also get on board. He said GhIPSS will embark on extensive engagements with corporate institutions with good information technology set-ups, to encourage them to also use e-bills pay. As with other initiatives by GhIPSS, e-bills pay is being offered through the banks.

 

Source: BFT

BoG announces policy rate today

The Governor of the Bank of Ghana, Dr. Ernest Addison is today [January 22, 2018] expected to announce the central bank’s policy rate for commercial banks for the next couple of months.

It follows the completion of the Monetary Policy Committee (MPC’s) annual meetings to review the Ghanaian economy.

Today’s announcement will be the first for this year and it is expected to affect interest rates charged by banks on their loans given to customers.

For last year alone, the central bank reduced the policy rate by 550 basis points.

The rate was reduced from 25.5 percent in January 2017 to 20 percent as at November the same year.

Checks by Citi Business News also indicate that between January and December 2017, the average interest on loans by commercial banks reduced by 7 percent.

It went down from 27.6 percent in January to 25.7 percent as at December 2017.

 

Source: GNA

BoG wants banks to improve risk management systems

The Bank of Ghana has called on banks to improve the quality of their risk management system, corporate governance and internal control practices.

Special Advisor to the Governor, Mrs Grace Akrofi, said with the implementation of sound risk management practices, banks would be able to access and set aside the appropriate capital needed for inherent operational risks as required under the capital requirement directives and the Basel ll and III frameworks.

Mrs Akrofi, who was speaking at the launch of the Royal Bank’s fifth Anniversary Celebration in Accra, said the BoG would also ensure that the banks comply with the international financial reporting standards.

“This is to guarantee uniformity in the presentation of financial accounts and accompanying notes to financial accounts,” she added.

She said the new minimum capital requirement offered valuable opportunities for consolidation within the Banking industry and encouraged small and under-capitalised banks with corporate governance challenges among others to merge and consolidate their operations.

She said the BoG is of the view that there were more benefits to be gained from consolidation, hence, their bias in encouraging mergers in the industry.

Mrs Akrofi said the consolidation process was expected to lead to the emergence of big Banks to help finance high-valued projects that would be transformative for the economy.

“Bank consolidation will pave way for bigger operations with relatively lower costs associated with the provision of banking services,” she said.

The Special Advisor said these would ensure stability and sustainability of the banking sector and contribute to the enhancement of the resilience of the financial system and contribute to the needs of the growing economy.

She said the new Bank’s and SDI Act has made provision for the establishment of criteria for mergers and acquisitions, which addresses in more details, what BoG must consider in determining whether or not to approve a merger or amalgamation under the Act.

Professor Bill Pupulampu, Chairman of the Board of Directors, the Royal Bank, said the Bank would continue to improve their operations and serve their clients better.

He said the future of the Bank was very promising and bright, having grown from a single branch in 2012 to 26 branches in five years, “we can only hope for greater things in the years ahead.”

He said the Bank’s assurance to their customers and other stakeholders was that; they would continue to improve their services and develop products to serve their changing needs and wants.

He said in 2014, through the vision and instrumentality of the Founder Alhaji Dr Adamu Iddrisu, The TRB Foundation now Alhaji Dr Adamu Iddrisu Foundation was inaugurated to provide relief in the area of Water and Sanitation, Health, Education, Culture and Sports to deprived communities.

He said since its establishment the Foundation had provided over 120 boreholes to 115 communities across the country under its flagship “water for life” project.

 

Source: GNA
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