o far, only about GHc731 million has been recovered out of the GHc10.1 billion in sub-standard assets that were held on the books of the nine indigenous banks that have been put in receivership since August 2017. This amounts to a little over 7.3 percent of the total asset value which has been handed over to the receivers to recover because the assets were considered of too low quality to be taken onto the books of the two banks – GCB Bank and Consolidated Bank – that acquired their liabilities and good quality assets under purchase and assumption agreements upon their liquidation.

This was revealed on Monday by Bank of Ghana Governor Dr Ernest Addison at the commencement of this year’s edition of the Ghana CEOs Summit in Accra.

So far, government has issued over GHc12 billion in resolution bonds to bridge the capital gaps of the nine liquidated banks, to provide sufficient capital for the two banks that have taken over their liabilities. It therefore needs to recover as much of the value of the substandard assets not taken over by those banks, to recoup its expenditure on the bonds issued.

Most of the recoveries – 72 percent – have been in the form of repayments by customers of the erstwhile banks on loans taken. The rest comprises sale of vehicles, liquidation of bonds and other income sources, primarily interest on fund placements and refunds of commissions paid.

According to the central bank Governor, the receivers that were appointed to wind down the outstanding positions of the various liquidated banks have fully engaged the judicial system to assist in the recovery of certain assets and monies from shareholders, directors and other loan defaulters. There are currently bout 50 cases related to the closure of the banks and the recovery of assets pending in various courts.

Indeed the recovery of assets has been fraught with challenges. Some of the individuals involved have initiated court proceedings of their own, actions which the BoG Governor alleges are aimed at frustrating the receivership process by engaging in what he calls “frivolous actions.”

Actually, some of these cases challenge the decision to liquidate some of the banks in the first place. Unibank’s erstwhile shareholders for instance have initiated court proceedings challenging the BoG’s computations which determined that the bank’s financial position was terminally insolvent at the time of liquidation. Indeed, the bank has won some degree of sympathy from some public policy commentators who agree with the accusation that some of the closures were at least partially politically motivated by the government which has used the central bank as an instrument with which to incapacitate the financial wherewithal of some major bank shareholders, deemed to be supporters of the major political opposition party. While the balance sheet figures and related revelations of misconduct with regards to corporate governance released by the BoG however support its regulatory actions in liquidating the banks, the selection of some of the five banks earmarked for equity finance support through the state promoted Ghana Amalgamated Trust initiative has again raised concerns as to the fairness of the banking industry restructuring process.

More clear-cut is the issue of poor documentation by some of the liquidated banks which has made it difficult for the receivers to identify and pursue some of the loan defaulters due to insufficient or non-existent information. Investigations so far have also revealed that some of the assets were not registered in the names of the specific financial institution, but in the names of related or connected parties, making it difficult to dispose of the underlying collateral to offset the outstanding loans. Asserted Dr Addison “Some of the loans were even fictitiously created and the Directors are being pursued to recover some monies.”

Since April last year, the BoG has been issuing an array of corporate governance and risk management directives aimed at plugging the regulatory loopholes exploited by bank directors, shareholders, management staff and borrowers for financially malfeasant purposes.