In this article, we provide you with list of collapsed banks in Ghana and some of the causes that led to their fall out.
The financial sector in Ghana has seen several ups and downs and collapsed of certain banks in Ghana between 2017 and 2020. Others who couldn’t stand the test of time were taken over by the Bank of Ghana.
After Nana Akufo-Addo was elected president in December, 2016, many private banks were hit by the new reforms in the sector.
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List of Collapsed Banks In Ghana
In 2017, Bank of Ghana approved the takeover two banks (UT Bank LTD and Capital Bank LTD) by GCB Bank Limited through its press release. This was because the bank failed to meet the new increment in the capital requirement which led to their license being revoked under the Purchase and Assumption Transaction by GCB Bank Limited.
The inability to meet this new capital requirement did not only affect these two banks but other five banks as well. These other five banks were turned into Consolidated Bank Limited in 2018. They included; included Unibank Ghana Ltd, The Royal Bank LTD, Beige Bank LTD, Sovereign Bank LTD, and Construction Bank LTD.
READ ALSO: List of Commercial Banks in Ghana
According to reports, it was stated that factors such as poor corporate governance, non-performing loans, credit risk, regulatory lapses lead to the collapse and take over of these banks.
5 Banks and their specific causes
UT Bank LTD
Bad loan against collateral practices, poor credit management practices were some of the factors that lead to the specific collapse of this bank.
Capital Bank LTD
It was noticed that Capital Bank owned an uncollected debt of GH₵11 billion to Capital Bank and UT Bank was another factor that led to the collapse of the banks. Other factors included, fraudulent license, bad risk management, and funds embezzlement.
UniBank Ghana LTD
According to Bank of Ghana, after reviewing the assets of UniBank Ghana Limited, it released they were under-capitalized.
Royal Bank LTD
This bank was also hit with under-capitalization as UniBank after a thorough review by the central bank, Bank of Ghana.
Construction Bank Limited
This bank obtained their license under false pretense hence led to their collapse.
Aside these seven banks, there we’re other 23 financial institutions who also fell out. They include;
1. Accent Financial Services Ltd
2. Adom Savings and Loans Ltd
3. AllTime Finance Ltd
4. Alpha Capital Savings and Loans Ltd
5. ASN Financial Services Ltd
6. CDH Savings and Loans Ltd
7. Commerz Savings and Loans Ltd
8. Crest Finance House Ltd
9. Dream Finance Company Ltd
10. Express Savings and Loans Company Ltd
11. First African Savings & Loans Company Ltd
12. First Allied Savings and Loans Co. Ltd
13. First Ghana Savings and Loans Co. Ltd
14. FirstTrust Savings and Loans Ltd
15. Global Access Savings and Loans Company Ltd
16. GN Savings and Loans Ltd
17. Ideal Finance Ltd. Finance House
18. IFS Financial Services Ltd
19. Legacy Capital Savings and Loans Ltd
20. Midland Savings and Loans Company Ltd
21. Sterling Financial Services Ltd
22. Unicredit Savings and Loans Ltd
23. Women’s World Banking Savings and Loans Co. Ltd
After the new reforms only a few banks were able to meet the new capital requirement. They are the ones operating currently in Ghana. Some others had to merge themselves to receive bail out from Government.