The GCB Financial institution missing nearly 50 percent of the deposits it inherited from the UT Lender and the Capital Financial institution to worry withdrawals, 4 months just after absorbing all the liabilities and selected property of the collapsed financial institutions, its Deputy Running Director in demand of Finance, Socrates Affram, has disclosed.
In August 2017, Mr Affram explained GCB Bank absorbed overall deposits of GHȼ2.3 billion from the two banking institutions but by December 2017 — four months following the invest in and assumption — it had dropped about GHȼ1 billion to stress withdrawals.
The predicament exerted undue pressure on the bank’s finances, forcing it to liquidate virtually all of its interbank investments to be capable to contain the ‘heat’, Mr Affram claimed.
GCB Bank also had to drop on the Bank of Ghana (Bog) for liquidity guidance to the tune of GHȼ400 million to be able to meet withdrawals, the DMD advised stock current market analysts and the media on Might 23.
He stated the reduction was in spite of assurances from the central lender that consumers necessary not to rush into withdrawing their deposits from the absorbing lender — GCB Financial institution, Mr Affram reported on May perhaps 23.
He made the disclosures when the financial institution took its switch at the details driving the figures programme organised by the Ghana Inventory Trade (GSE) for shown firms.
“If you scrutinise our published stories, you will see that in the quarters prior to the assumption, we had a substantial volume of interbank investments and as a financial institution, simply because of these hefty withdrawal, we experienced to liquidate all our investments in that house,” he said.
“We experienced to go to the central financial institution to inform them we had been bleeding much too significantly from the process. So we borrowed GH ȼ400 million from them,” he famous.
Subsequently, he mentioned, the bank was ready to mobilise some deposits and tapped into some of the corporations they took in excess of, primarily in the region of trade.
Poisonous financial loans
Mr Affram also downplayed problems that GCB Bank took about undesirable financial loans from the two banking companies, stating that the financial institution did not just take above all the financial loans.
“In conditions of financial loans, people today were fearful GCB had absent to take toxic financial loans but that was not the case.
Even with the deposits, not all of them ended up taken above by the bank simply because some of them were fictitious and also with the financial loans, we selected a handful of,” he defined.
“From the incredibly onset, we took more than about GHȼ75 million and then in the training course of time as we engaged some of the buyers and their business enterprise designs, we introduced on board an added GHȼ75 million so in full, the personal loan property we took from UT and Funds was not extra than GHȼ150 million,” he emphasised.
In impact, he claimed, the contribution of the two financial institutions to the property of GCB had been compensated for by a bond of about GHȼ2.2 billion.
420 staff members laid off
In total, he reported, the financial institution experienced to lay off 420 staff out of the 850 it inherited from the two financial institutions.
He explained that adopted the rationalisation of the branches that it took about which were decreased from 53 to 22.
“Between UT and funds, we had standard staff of about 850 from day a person and we labored with this variety until eventually February 2018 and that was when we pruned it down to 550 owing to the rationalisation of the branches,” he explained.
“We assumed 53 branches and we settled on 22 so about 300 employees experienced to leave. About 120 also had to leave afterwards simply because their files did not meet up with our needs,” he included.
Mortgage business enterprise
The Running Director of GCB, Ray Sowah, outlining why the financial institution experienced nevertheless not commenced its house loan business, reported governing administration was delivering it with some concessionary lending to support the property finance loan organization and that was what was delaying the choose-off of the organization.
“We have not taken off totally due to the fact the modalities from govt have not been entirely completed so at the time the modalities are concluded, we will roll it out,” he mentioned.
“Latest by July, we really should be equipped to get off but a good deal is dependent on the modalities becoming finished by federal government with which we are going to function with,” he added.