Amoabeng's UT Bank Should Have Been Given A Bailout : The 'Too Big To Fail' Local Banks

Feature Article Amoabeng's UT Bank Should Have Been Given A Bailout : The 'Too Big To Fail' Local Banks

The Bank of Ghana on August 14, 2017, announced that it had revoked the license of UT Bank and ordered GCB Bank to take over its operation because it had severe capital impairment. Provisional figures released by the central bank showed the total liability of UT Bank stood at GH¢850 million while its total asset was pegged at GH¢112 million.

Today, the founder of UT Group, Prince Kofi Amoabeng has been put before an Accra circuit court for his role in the collapse of his bank in 2017 and he is facing charges of stealing and money laundering. Citi News‘ court correspondent, Fred Tettey Djabanor said Kofi Amoabeng was put before court together with the CEO of defunct Beige Bank, Mike Nyinaku. On the same day , Accra Circuit court granted bail to the President of UT Holdings, Prince Kofi Amoabeng but Mike Nyinaku was denied bail. Mike was then remanded into prisons custody to reappear on January 22, 2020. His application for bail moved by his lawyer, Thaddeus Sory, was however accepted by the court on the 22nd but Mr Sory in his bail application revealed that Nyinaku had fallen ill and was on admission at the Police Hospital.

According to the prosecution, the two men who run different organizations allegedly misappropriated funds in excess of GH¢200 million belonging to their customers. The prosecution said investigations were still ongoing into their separate cases to ascertain the full extent of their offences. The Bank of Ghana (BoG ) says they are hopeful that the prosecution of UT Bank founder, Kofi Amoabeng and Beige Bank CEO, Mike Nyinaku will be seen to its legal conclusion. Speaking after the two were arrested and put before the court on the 14th January 2020, the second Deputy Governor for BoG Elsie Awadzi said they will work with all relevant state institutions in the prosecution of UT Bank founder, Kofi Amoabeng and Beige Bank CEO, Mike Nyinaku.


According to Elsie Awadzi, after they (BoG) finished the banking sector cleanup exercise they have submitted all relevant information to the law enforcement agencies to conduct their investigations. She added that the law enforcement agencies are expected to do the needful if they find any criminal implication in the conduct of those involved.


Cleaning up the financial sector should have considered the ”too big to fail” local banks in Ghana considering their huge contribution to the economy especially in the area of employment. Fostering local participation in the financial sector is key in ensuring sustainable economic growth in a country whose GDP is service-driven. This concept is not new to the developed countries so why didn’t BoG apply it in cleaning up the sector?

“Too big to fail” describes a concept in which the government will intervene in situations where a business has become so deeply ingrained in the functionality of an economy that its failure would be disastrous to the economy at large. If such a company fails, it would likely have a catastrophic ripple effect throughout the economy.The failure may cause problems with companies that rely on the failing company’s business as a customer as well as problems with unemployment as workers lose their jobs. Conceptually, in these situations, the government will consider the costs of a bailout in comparison to the costs of allowing economic failure in a decision to allocate funds for help.


In USA, Lehman Brothers’ collapse marked the peak of the financial crisis in September 2008. With its bankruptcy filing, government regulators discovered the biggest banking firms were soo interconnected that only large bailouts would prevent a substantial portion of the financial sector from failing. In the case of Ghana, its obvious that UT bank will surely be one of the ”too big to fail” local banks to be considered irrespective of what the issues were. UT Bank ,once upon the time brought huge financial relief to the market women via their lending programs; promoting economic activities in the informal sector. They did give the Ghanaian economy a certain employment revolution and supported most local businesses and entrepreneurs in the likes of Data Bank, Gyata Cement , Zoomlion Gh Ltd among many others.


I will leave you to judge and decipher if the actions of BoG and that of GoG to UT bank was indeed a healthy exercise of fairness for God and country. UT Bank was a high earned Brand that took soo many years of commitment and sacrifices to build and which has given Ghana some global image. There are a lot to say to defend UT Bank although they have admitted their flaws to BoG and even offered a proposal to settle the debt owned. Below is an exclusive interview with Kofi Amoabeng by TV3 on his side of the story. Kindly take time, listen and watch the video and make your own conclusion.

Speaking on the matter after nearly two years after the BoG’s action, Kofi Amoabeng in a TV interview said the fortunes of the bank could’ve been turned around if the Bank of Ghana had given him more time. The government found us in that situation, [but] was this the best route to take? because we had investors who were ready with some proposals. They [government] decided that the best thing is to close down UT Bank which I find really difficult to take but from where they are sitting, they decide that was the best thing for the country. I don’t bear grudges but the point is, if as UT Bank we owed GH¢800 million and an investor comes and he says I’m ready to pay GH¢400 million [so] Bank of Ghana write off the [other] GH¢400 million, but BoG takes a decision to close down the bank which will cost the nation at least GH¢ 2.2 billion, it doesn’t make sense to me,” he said.