their creditors before distributing the surplus, if any, to investors and shareholders of the bank.

What is worse, the shareholders and investors of the the bank will have to wait a little much longer to know their position with the banks because the process is expected to take a while longer than anticipated.

In the event that nothing is left after settling all the creditors, shareholders and investors will not receive anything.

A former Director-General of the Securities and Exchange Commission (SEC), Dr Adu Anane Antwi, disclosed this in an interview with the Daily Graphic in Accra yesterday.

“Shareholders may or may not receive the full amount, depending on the sale of assets of the defunct banks by the receiving institution,” he said.

Assets/liabilities

The picture is even dimmer for the shareholders of the bank because of the huge disparity between the assets of the banks and their liabilities.

Provisional figures available to the Daily Graphic indicate that the total liability of the UT Bank, for instance, stands about GHc850 million, while its total assets are valued at just GH¢112 million.

The liability of the Capital Bank is GH¢800 million, while its assets are GH¢156 million.

Available assets and funds

At a press conference last Tuesday to announce the fate of shareholders after the Bank of Ghana (BoG) had closed down the UT and the Capital banks, the Managing Director of the Ghana Stock Exchange (GSE), Mr Kofi Yamoah, said the benefits due shareholders of UT Bank would depend on the available funds and assets of the two banks.

“The shareholders’ issue is in the hands of the receiver, and the PwC has been appointed the receiver as far as this transaction is concerned and we will liaise with them and in due course, so that we can provide information for shareholders as and when work progresses by the PwC,” he said.

Process

Taking the Daily Graphic through the process of retrieval of the assets of the banks, Dr Antwi said after the GCB Bank had taken over some assets and liabilities, the PwC would have to sell the physical assets and go after debtors to retrieve all the loans owed the two banks.

“It is only after this has been done that the PwC can pay creditors of the banks and then focus on the shareholders and investors,” he said, adding that it must ensure that every pesewa owed every creditor was settled before focusing on shareholders.

But he indicated that the PwC would be mandated to distribute the money proportionately to the shareholders, emphasising that it would have to publish any arrangements in the dailies to ensure fairness.

Dr Antwi dismissed claims that investors of the Capital Bank would not get anything from their investments, noting that the essence of ordinary shareholding mandated the receiving institution to distribute any amount that would be left to the investors and shareholders after paying off the creditors.

Borrowing attitude

He used the opportunity to advise Ghanaians to make efforts to pay their loans on time to avoid bad debts on the books of banks.

“Borrowers’ attitude of not paying their loans is killing a lot of these banks and if that continues, it could cripple those banks,” he stressed.

 Dr Antwi advised banks to focus more on the ability of people to pay back their loans on time, instead of just lending out money.

Background

The BoG announced the takeover of two indigenous banks, UT and Capital, by the GCB Bank due to their excessive liabilities and their failure to improve their balance sheets.

The news of their collapse surprised many, who thought both banks had a brighter future to compete on the international market.

But many watchers and banking experts had predicted the doom of about 13 banks between 2014 and 2016 due to several factors, including bad loans sitting on their books.

For the UT and the Capital banks, some say the writing had been on the wall but it was ignored by their management.

A story carried by the Insight newspaper two years ago which has now gone viral suggested that the then Chief Executive Officer (CEO) of the Capital Bank, Mr John Kofi Mensah, had sounded the alarm bells to the Board of Directors but they were not heeded to.