The Governor of the Bank of Ghana (BoG) Dr Ernest Addison, has reiterated the fact that the banking sector is solid, well capitalised and healthy, though, there are a number of institutions in the industry that are going through distress.
He said there were institutions with unsustainable business models and poor corporate governance practices which led to misappropriation of depositor’s funds.
That, he said, pushed such institutions to the threshold of insolvency with liquidity challenges; it was not reflection of the banking sector in the country.
Speaking at the official opening of the Standard Chartered Bank’s head office in Accra on October 3, Dr Addison said, “we have strong banks and savings and loans that are doing well, however, we are working with Ministry of Finance on a recovery plan which we believe to be implemented soon.”
The President, Nana Addo Dankwa Akufo-Addo explained that there were situations where directors of banks took depositors monies, lend them to themselves and failed to pay back which led to liquidity challenges, therefore, making about a quarter of banks in the country becoming insolvent.
This, he said, resulted in reliance of such affected banks on liquidity support from the Bank of Ghana (BoG) because “without liquidity support from the BoG, they were bound to fail and collapse with depositors losing their entire savings and workers losing their jobs.”
He said an amount of GH¢12.7 billion of public funds which constituted an GH¢8 billion bond issued by the Ministry of Finance (MoF) and GH¢4.7 billion of liquidity support from the BoG was ejected into some banks that fell.
He ,however, reiterated that those who were responsible for the collapse of some banks, causing job loss and mismanagement of depositor’s monies would face the full rigor of the law and when found culpable, would suffer the consequences.
“I have said before but let me reiterate that those responsible for the sequence of the activities which led to the crisis of the banks will face the full brunt of the law and if they are found to have broken the law, they will suffer all the consequences,” he said.
The bank’s strategy
The Group Chief Executive Officer (CEO) of Standard Chartered Plc, Mr Bill Winters said investments in the country was another important strategic step to enable access to a pool of highly skilled and talents who could support the ambition of the bank to becoming a globally competitive focus in the banking space.
“Ghana is a strategically important market for the bank and we are committed to building a sustainable business, attracting the best talents and expertise to support the client’s business growth,” he added.
He explained that the new building was a testament of the bank’s brand promise that they were in the country for good and show enduring support for the community and the commitment to Ghana. — GB