Business

‘It was necessary’ – Barclays bank MD hails banking sector cleanup

2 Mins read

Managing Director for Barclays Bank Ghana now Absa, Abena Osei-Poku has hailed the banking sector cleanup.

“It [banking sector cleanup] was a necessary exercise. We had to sanitise the financial system so that we create an environment for stronger and well-run banks to thrive and play our primary role” she said on Accra-based Citi FM.

In the biggest reform in banking history in Ghana, the  Bank of Ghana (BOG) revoked the licenses of nine universal banks, 347 micro-finance companies of which 155 had already ceased operations.

Some 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions were also closed.

It explained that the move was to boost confidence in the financial sector whiles protecting the deposits of customers.

Speaking in the interview, the Barclays MD said there had been a lot of significant improvement in the operations of both banks and the regulator after the clean-up exercise.

“If you step back and look at what has happened since this reform started in August 2017, you’ll see that banks have embraced stronger corporate governance, even our risk management practices have improved, banks are more compliant to regulations and the central bank itself has also improved their banking supervision” she revealed.

Some of the indigenous banks which had their operational licenses revoked include Unibank, UT Bank, and Capital Bank, Heritage Bank, Premium Bank and Royal Bank.

The banks were declared insolvent with their directors and managers cited for misappropriating company funds.

A report by the Bank of Ghana into the collapse of UT and Capital banks revealed that several high-profile directors of the banks used a carefully spun web of related party transactions to grant huge loans to themselves and their associates.

The government has dragged some former directors of the defunct banks to court over the matter.

Founder of the defunct Capital Bank, William Ato Essien, and three others have been slapped with 26 charges for their roles leading to the collapse of the financial institution.

The three include Tetteh Nettey, Fitzgerald Odonkor and Kate Quartey-Papafio -who all served as executives of the bank.

They were charged with conspiracy to steal contrary to sections 23 (1) and 124 (1) of the criminal offences Act, 1960 (Act 29).

According to the state, Fitzgerald Odonkor between October and November 2015  abetted William Ato-Essien and Tetteh Nettey to dishonestly appropriate the sum of hundred million Ghana Cedis (GHC100,000,000)  belonging to Capital Bank Limited.

Last week, founder of UT, Prince Kofi Amoabeng and CEO of defunct Beige Bank, Mike Nyinaku, were also dragged to court by the state for their various roles which led to the collapse of the financial institutions.

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