• About Us
  • Contact Us
  • Photo Gallery
  • Privacy Policy
  • Terms of Use
  • Citi TV
Monday, March 8, 2021
Citinewsroom - Comprehensive News in Ghana
  • Home
  • News
  • Business
  • Sports
  • Showbiz
  • Coronavirus
  • Infographics
  • Livestream
  • Election 2020
No Result
View All Result
Citinewsroom - Comprehensive News in Ghana
  • Home
  • News
  • Business
  • Sports
  • Showbiz
  • Coronavirus
  • Infographics
  • Livestream
  • Election 2020
No Result
View All Result
Citinewsroom - Comprehensive News in Ghana
No Result
View All Result

Banking crisis: Unlawful loans ‘sunk’ UT Bank – Report

Delali Adogla-BessabyDelali Adogla-Bessa
August 10, 2018
Reading Time: 2min read
Ibrahim Mahama was said to be owing the bank GHS302m

Ibrahim Mahama was said to be owing the bank GHS302m

ShareShareShareShare

A swathe of non-performing loans, some granted contrary to banking regulations, on the books of UT Bank contributed to the bank’s collapse, an investigative report has noted.

A number of these breaches were noted in dealings with companies linked to UT Bank.

The Banking Act requires that bank loans granted to its related entities, not connected to the UT Group, should be classified as single borrowers.

This is for purposes of establishing a single obligor limit, i.e., the maximum amount a bank is allowed to lend, which stands at 10 percent of the bank’s net own funds for unsecured loans and 25 percent of the bank’s net own funds for secured loans.

But the report noted that several loan facilities exceeded the prescribed single obligor limit.

“This behavior persisted over several years, and BSD examination reports have highlighted its prevalence in onsite inspection reviews,” the report stated.

“The pervasive incidence of SOL [single obligor limit] breaches underscore the rather poor credit management practices, poor credit governance, and supervision,” the report added.

In some instances, UT Bank requested a waiver of the single obligor limit to “cover exposures emanating from the erosion of the bank’s equity.”

For example, On May 12, 2016, the BSD sought approval to grant a waiver request for a single obligor waiver made for debts in relation to Ibrahim Mahama, the CEO of Engineers and Planners.

There was definite concern over the loans granted Ibrahim Mahama per an emergency Board meeting held on May 20, 2016, cited in the report.

“The board expressed great concern about Mr. Ibrahim Mahama’s inability to meet his obligations to the bank. As at May 2016, his total exposure was approximately GHS302m and he had made no effort to honour any of the assurances he gave when he met them on 29th March, 2016.”

The report also noted that subsidiaries of Excel Courier, a company in which the MP for Efuttu, Alexander Afenyo Markin received an under-collateralized loan of close to GHS30.8 million from the bank.

The value of the collateral was ¢990,000.

South African firm scared away

A South African private equity group, Leapfrog Investments, expressed interest in investing in UT Bank and undertook a due diligence probe of the bank in 2014.

Leapfrog noted that the top 20 loans UT granted, with a balance of GHS457 million had a high legal risk of loss.

Documentation for only 18 of the 2o most substantial credited exposures was provided

“Evidence of the approval of the credit committee of UT Bank Board has not yet been provided for 6 of the 18 facilities, nor have copies of the Board resolutions of the relevant borrows in respect of 4 of the 18 credit facilities.”

“No evidence of stamping had been seen on mortgages, and none of the mortgages had been registered with the company’s registry or collateral registry.”

Also, “UT Bank’s loan and loss provisions, as assessed by Leapfrog may have been understated by as much as GHS136 million,” the report stated.

–

By: citinewsroom.com/Ghana

ShareTweetSendSend
Previous Post

Ghana, Ivory Coast, agree to implement ITLOS ruling

Next Post

My wife deserves praise for KATH maternity ward – Nana Addo

Related Posts

Opinion

Terry Mante writes: Demystifying the banking sector clean-up

July 29, 2020
Chairman Wontumi
Politics

Ibrahim Mahama sues Chairman Wontumi for defamation, demands GHS5M

July 13, 2020
General

COVID-19: Ibrahim Mahama donates Anaesthetic machine to UGMC

July 13, 2020
General

COVID-19: Ibrahim Mahama supports households in Muslim, Christian communities

April 20, 2020
Kofi Amoabeng
Business

UT Bank collapse: Kofi Amoabeng, five others granted bail

February 12, 2020
Business

Full charges against defunct UT bank boss Kofi Amoabeng, five others

February 5, 2020
Next Post

My wife deserves praise for KATH maternity ward - Nana Addo

TOP STORIES

Sections of N1, N2 and N4 highway to be closed down for repair of transmission lines

March 8, 2021

Lack of dynamism from GRIDCo contributed to power cuts – Mutawakilu

March 8, 2021

Absa Deputy CEO, Peter Matlare dies after battling COVID-19

March 8, 2021
Load More
ADVERTISEMENT
Citinewsroom – Comprehensive News in Ghana

CitiNewsroom.com is Ghana's leading news website that delivers high quality innovative, alternative news that challenges the status quo.

Archives

Download App

Download

Download

  • About Us
  • Contact Us
  • Photo Gallery
  • Privacy Policy
  • Terms of Use
  • Citi TV

© 2020 All Rights Reserved Citi Newsroom.

No Result
View All Result
  • Home
  • News
  • Business
  • Sports
  • Showbiz
  • Coronavirus
  • Infographics
  • Livestream
  • Election 2020

© 2020 All Rights Reserved Citi Newsroom.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?