Bawumia dared to name banks that risk collapsing

The Ranking Member of the Finance Committee, Casiel Ato Forson is daring Vice-President Dr. Mahamudu Bawumia, to come out and tell Ghanaians how many banks risk collapsing under his stewardship as Chairman of the country’s Economic Management Team.

He is of the strong view that by virtue of the position that Dr. Bawumia is occupying, he will find it very difficult to disclose such sensitive information that has the tendency to create chaos in the country.

On September 12, 2016, then Running mate of the flag bearer of the New Patriotic Party (NPP), Dr. Bawumia in one of his lectures dubbed: ‘State of the Ghanaian Economy: A Foundation of Concrete or Straw?” predicted that quite a number of commercial banks were on the verge of collapsing due to fragility on the Ghanaian economy.

He went further to state that significant rise in bad loans has had a rippling effect on the banking sector and that if the banks were asked to provide fully for all bad loans captured in the books, quite a number of them would collapse.

All though he did not mention names, he said “Eight banks were identified to exhibit significant weaknesses, with capital adequacy ratios below 10% (Some below 5%) and nearing collapse.

On Monday, August 14, 2017, the Bank of Ghana announced the complete takeover of UT Bank Limited and Capital Bank Limited by the GCB Bank Limited after revoking the licences of the two commercial banks, confirming Dr. Bawumia’s prediction in the heat to 2016 general elections.

The central attributed its actions to the severe impairment of the capital of the two banks.

But the former Deputy Finance Minister addressing journalists in Accra on Tuesday over the two insolvent banks argued that Dr. Bawumia took advantage of the political landscape and announced portions of a leaked report which was an assessment conducted on some commercial banks in the country.

“He only took advantage in the political landscape to disseminate information that is supposed to be classified because of the fact that he worked in the Bank of Ghana and the fact that he obviously has some links there. In early 2016, the then President Mahama’s administration asked that Assets Quality Test or report be conducted on banks. When we actually asked that that is supposed to be done, it took approximately seven months for the process to go through. We very much so contracted a transaction advisor to conduct very due diligence on some of these banks and produce a report. The draft report came and was submitted to the Government and was classified because it was market sensitive. It was released to the government or Bank of Ghana. Part of it was leaked and the then candidate or running mate Bawumia decided to take political advantage and announce it. I thought it was overly unfair,” he noted.

Nevertheless, he said now that Dr. Bawumia is in government, it will be fair on his part to announce the names of commercial banks that risk collapsing if the central bank does not intervene.

“Can you go back to him that I Ato Forson says that since he is now the Chairman of the Economic Management Team, he should inform this Republic how many commercial banks are threatened under his stewardship? We need to know that information.”

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