The Bank of Ghana revoked the licenses of UT Bank Ghana Ltd. and Capital Bank Ltd., citing a "severe impairment" of their capital, and approved a transaction that transfers all deposits and selected assets of both lenders to GCB Bank Ltd. in a bid to ensure financial stability and protect depositors' funds.

The two banks' remaining assets and liabilities will be realized and settled, respectively, through a receivership process undertaken by Vish Ashiagbor and Eric Nana Nipah of PricewaterhouseCoopers. The Ghana Stock Exchange indefinitely suspended UT Bank's listing status, with effect from Aug. 14.

GCB Bank took control of the main offices and branches of UT Bank and Capital Bank, adding 53 branches to its existing 161 branches. Customers of both troubled banks are now GCB Bank clients, while affected employees will become GCB Bank staff on an interim basis.

The transition will take up to six months, according to GCB Bank.

Raymond Amanfu, head of banking supervision at the central bank, told Reuters that UT Bank and Capital Bank were saddled with nonperforming loan ratios of 60% to 70% and that their liabilities exceeded their assets, the newswire reported Aug. 14. Joy Business reported earlier in July that two Ghanaian lenders were facing closure unless they obtained emergency funds to recapitalize their operations.

Bank of Ghana Governor Ernest Addison reportedly said action will be taken against any directors or shareholders found culpable for contributing to the two banks' collapse, according to Reuters.

The Ghanaian central bank said it selected GCB Bank among three other companies "on the basis of purchase price, cost of funding, branches to be retained, staff to be employed and impact on the acquiring bank's capital adequacy ratio."