Bank of Ghana Covers $461 Million of GCB Takeover Liability
(Bloomberg) -- GCB Bank of Ghana Ltd. said it received a 2.2 billion-cedi ($461 million) bond from the central bank for taking over the assets of two failed lenders in 2017.
Ghana’s biggest lender by branch network acquired the liabilities and some assets of UT Bank Ltd. and Capital Bank Ltd. in August after the companies collapsed as they failed to meet the central bank’s requirements for capital adequacy. The Bank of Ghana issued a bond, which it gave to GCB to compensate for the shortfall of UT and Capital’s assets against their debts, GCB Head of Treasury Anthony Asare said Monday in an interview in the capital, Accra.
The bond carries a coupon of 12 percent and matures in 2027, he said.
GCB also took 400 million cedis in overnight loans from the central bank on two occasions in October to cope with increased withdrawals by the customers of UT and Capital, Asare said.
“We did that because of the initial jump in withdrawals, but eventually the bank became cash rich from operations,” Asare said.
The central bank’s head of treasury, Stephen Opata, wasn’t available to comment when contacted at his office. Esi Hammond, a spokeswoman for the central bank, couldn’t immediately comment when contacted by phone.
GCB’s shares closed unchanged at 6.30 cedi in Accra on Monday after rallying 25 percent since the beginning of the year, valuing the company at 1.7 billion cedis.
Ghana’s banking regulator revoked the licenses of UT and Capital as it is stepping up efforts to bolster a sector beset by bad loans and poor governance. Lenders in the West African nation have to meet a December-deadline to raise their minimum capital levels more than threefold.
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