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Heritage, Premium Banks now defunct

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Heritage, Premium Banks now defunct

chronicle January 4, 2019

The licences of Heritage Bank Ghana Limited and Premium Bank have been revoked by the Bank of Ghana (BoG).

The banks have now been merged with the Consolidated Bank of Ghana (CBG), Governor of the Bog, Dr Ernest Addison, announced at a press conference yesterday.

BoG also approved a purchase and assumption agreement with CBG Limited, formed in August 2018, with five banks whose licences were revoked.

The CBG, following the recent development, is required to take over the liabilities and selected assets of the now defunct Heritage Bank.

“Heritage Bank, among other things, obtained its banking licence on 4th October 2016 on the basis of capital from questionable sources. Furthermore, the bank was unable to meet the new minimum capital requirement of GH¢400 as of 31st December 2018,” Dr. Addison explained.

Premium Bank

According to Dr Addison, Premium Bank, among other things, was found to be insolvent as of 30th November 2018 with a capital adequacy ratio of debiting 125.62 per cent.

He indicated: “The major shareholder is not fit and proper” per the country’s banking laws, describing the issue as an old problem, and that issues around it have been over flogged.

The Governor said: “If we were very fair, we would have shutdown Premium Bank in August 2018,” adding that the merger processes started at the time, but “the merger fell through.”

He noted: “The government of Ghana has issued a bond of in the face of GH¢1.4 billion to the Consolidated Bank to cover the gap between the value of good assets and liabilities of the two banks.”

Meanwhile, the Governor of the Central Bank of Ghana assured depositors of the safety of their funds, indicating they would have access to their funds anytime they want.

At the expiry of the December 31, 2018 deadline for all commercial banks in the country to recapitalize, only 16 banks had been able to secure the minimum capital of GH¢400 million.

By Maxwell Ofori / www.thechronicle.com.gh

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