Bank of Ghana (BoG) has said, it will investigate and sanction officials whose activities led to the collapse of UT Bank and Capital Bank.

“The last phase of the BoG’s action would involve a thorough investigation of operations of UT Bank and Capital Bank and appropriate action will be taken against shareholders, Directors, and key management personnel who are found to be culpable,” the BoG Governor, Dr. Ernest Addison revealed during a press conference yesterday in Accra.

This follows an announcement by the Central Bank of the collapse of both banks, following their inability to turn around their negative capital adequacy position.

That, according to BoG necessitated a Purchase and Assumption agreement allowing GCB Bank to take over all deposit liabilities and selected assets of both UT Bank and Capital Banks, per section 123 of the Banks and Specialised Deposit-Taking Institutions (SDIs) Act, 2016 (Act 930).

The governor noted that “UT Bank and Capital Bank were heavily deficient in capital and liquidity and their continuous operation could have jeopardized not only their depositors’ funds, but also posed a threat to the stability of the financial system.”

“It, therefore, became necessary for the Bank of Ghana to revoke their licenses and approve a Purchase and Assumption (P&A) transaction to allow GCB Bank, a large bank with the right balance sheet, to take over all deposits and selected assets of UT Bank and Capital Bank.”

Dr. Addison also reiterated to customers of the two banks that their investments were safe and that “no depositor will lose his or her funds and all depositors can continue to do normal banking business with GCB Bank.”

According to the central bank the main offices and branches of UT Bank and Capital Bank will be under the control of GCB bank and will be opened for normal business transactions.

The takeover of two banks at the same time will be the first and biggest in the history of the banking industry in Ghana.

The move, BoG said, was to rescue the two from further challenges as both balance sheets were currently in red.

GCB, the BoG boss said, was selected amongst 3 others on the basis of purchase price, cost of funding, branches to be retained, staff to be employed and impact on the acquiring bank’s capital adequacy ratio.

Deposits of customers of the two banks he added, will be protected by government as the sale is finallized.

Dr. Addison indicated that customers who failed to fulfill their loan payments obligations will be highly pursued.

In addition, he said, top level management of the two banks including the Managing Directors will lose their jobs following the development.

UT Bank Limited formerly known as Best Financial Services, later UT Financial Limited was incorporated on April 18, 1996 under the Companies Code, 1963 (ACT 179) as a private limited liability company.

On February 19, 1997, the Bank of Ghana formally granted the company a license to operate as a non-bank financial institution and a certificate to commence business on April 24, 1997.

UT Bank was founded by Prince Kofi Amoabeng and Joseph Nsonamoah on April 18, 1996 and is headquartered at Airport, in Accra, Ghana. The company currently employs 710 persons.