Banking sector reforms: Premium, Heritage licences revoked

Banking sector reforms: Premium, Heritage licences revoked
Source: Ghana | | George Nyavor |
Date: 04-01-2019 Time: 05:01:27:pm

The operational licences of Heritage Bank and Premium Bank have been revoked by the Bank of Ghana, the Governor announced, Friday.

Dr Ernest Addison said the liabilities and selected assets of the two institutions will be taken over by the Consolidated Bank Ghana following the approval of a purchase and assumption agreement by the regulator.

Speaking at a press conference at the Bank of Ghana head office in Accra, he revealed that Premium Bank was found to be insolvent.

He said the bank had a negative capital adequacy ratio: at least a negative 125% adequacy ratio.

Dr Addison also revealed that Heritage Bank “obtained its license with questionable sources of capital”.

Both Premium Bank and Heritage Bank have been unable “to meet the minimum capital requirement” of GH¢400 million, the Governor announced.

Read the below the Governor’s detailed comments on the resolution of the two banks.

Read BoG creates Consolidated Bank to take over 5 struggling banks for background on the banking challenges.

Dr Ernest Addison

Photo: Dr Ernest Addison


Pursuant to Section 123 of the Banks and Specialised-Deposit-Taking Institutions Act, 2016 (Act 930), the Bank of Ghana has revoked the banking licences of Premium Bank Limited and Heritage Bank Limited with effect from the date of this Notice and has appointed Mr. Vish Ashiagbor of PricewaterhouseCoopers as Receiver for the two banks.

Complete details of the bases on which the licences of the two banks have been revoked are attached as Annexures 2 and 3. Among other things:

  • Premium Bank was found to be insolvent as of 30th November 2018 with a capital adequacy ratio of negative 125.26%;
  • Heritage Bank among other things obtained its banking licence on 4th October 2016 on the basis of capital with questionable sources. Furthermore, the bank was unable to meet the new minimum capital requirement of GHC 400 million as of 31st December 2018.

The Bank of Ghana has also approved a Purchase and Assumption Agreement between the Receiver and Consolidated Bank Ghana Limited (CBG) under which the Receiver has transferred some assets and liabilities of the two banks to CBG.

All deposits (current, savings and fixed deposit accounts) of the two banks have been transferred to CBG with effect from the date of this notice.

The Government of Ghana has issued a bond in the face of GHC 1.403 billion to CBG to cover the gap between the value of the good assets and liabilities of the two banks transferred to CBG.

All deposits of the two banks are safe and customers will continue to have full access to their funds.