Bank of Ghana (BoG) has said it revoked the operating licence of uniCredit Ghana Limited because the institution's adjusted net worth of negative GH¢221.32 million as of the end of May 2019 revealed that its paid-up capital was impaired in violation of Section 28(1) Act 930.
uniCredit Ghana Limited was a savings and loans company that belonged to former Finance Minister and former BoG Governor, Dr. Kwabena Duffuor.
The BoG report also said uniCredit's adjusted capital adequacy ratio of negative 97.83% as of the end of May 2019 was in violation of Section 29(2) of Act 930.
“This was mainly due to the non-performing related party exposures of GH¢160.10 million to uniSecurities which is far in excess of its negative networth.
“The institution has been breaching the statutory cash reserve ratio requirement since April 2018 while also it was unable to meet the deposit withdrawals of customers due to its severe liquidity challenges. The BoG received many complaints from the institution's customers about their inability to access their funds. And the institution had a high percentage of non-performing loans.”
Warning From Regulator
The BoG said it directed the board and management of uniCredit to immediately inject additional capital to address the capital deficiency but that was not successful.
uniCredit was found to be insolvent with a negative capital adequacy ratio and negative net worth following the central bank's assessment as of December 2018.
“The institution is currently over exposed to a related party, uniSecurities Limited, a sister company. The institution's inability to access its funds from uniSecurities, even though overdue, has resulted in severe liquidity challenges and its inability to meet withdrawal requests of customers.”
uniCredit – formerly Kantamanto Savings and Loans Company Limited – was given an operating licence in October 1995 and commenced operations on 1st November 1995.