The Bank of Ghana placed uniBank (Ghana) Ltd. in administration and appointed accounting firm KPMG as its administrator, effective March 20.
The regulator said the move is aimed at "saving uniBank from imminent collapse." It will also prevent potential losses to depositors and creditors and ensure that the lender's financial condition will not create further risks to the wider financial system.
The central bank said uniBank has "persistently suffered liquidity shortfalls and consistently breached its cash reserve requirement." As a result, the lender has relied extensively on liquidity support from the Bank of Ghana over the past two years — amounting to more than 2.2 billion Ghanaian cedis — to meet its recurring liabilities.
The bank had also maintained a capital adequacy ratio of below zero, making it technically insolvent. Its capital adequacy ratio stood at negative 24% in December 2017.
UniBank will remain open for business under KPMG's management and control, with oversight provided by the Bank of Ghana, and will not be closed and liquidated.
As administrator, KPMG will be tasked to assess the state of uniBank's assets and liabilities and exercise a variety of powers to rehabilitate and return it to regulatory compliance and viability within a period of six months, at the end of which the bank will be returned to private ownership and management.
As of March 20, US$1 was equivalent to 4.42 Ghanaian cedis.