{"id":693107,"date":"2019-08-27T15:02:59","date_gmt":"2019-08-27T15:02:59","guid":{"rendered":"
\n\t\t

Mr. Martin Asamoah, Executive Director of CDH Savings & Loans and Dr Edem Bart Williams, CEO, Commerz Savings And Loans<\/strong><\/p>\n

CDH SAVINGS and Loans Limited, one of the 23 institutions whose licences were revoked recen"},"modified":"2019-08-27T15:02:59","modified_gmt":"2019-08-27T15:02:59","slug":"cdh-was-over-exposed-to-affiliates","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/08\/27\/cdh-was-over-exposed-to-affiliates\/","title":{"rendered":"CDH Was Over Exposed To Affiliates"},"content":{"rendered":"

<\/p>\n

\n

Mr. Martin Asamoah, Executive Director of CDH Savings & Loans and Dr Edem Bart Williams, CEO, Commerz Savings And Loans<\/strong><\/p>\n

CDH SAVINGS and Loans Limited, one of the 23 institutions whose licences were revoked recently, was over exposed to its affiliate companies to the tune of 319 per cent, contrary to the regulatory limit of 25 per cent of the Bank of Ghana (BoG).<\/p>\n

A report by the central bank on CDH Savings and Loans Ltd also cited the company\u2019s inability to sell repossessed collaterals which caused liquidity challenges, resulting in its inability to meet withdrawal requests from numerous depositors.<\/p>\n

\u201cThe Bank of Ghana kept receiving complaints from individuals and institutions of their inability to access\/withdraw funds from their accounts,\u201d the report stated.<\/p>\n

According to the BoG report, the inability of CDH to access placements\/investments with other insolvent financial institutions, including related companies, worsened its solvency liquidity situation.<\/p>\n

In September 2018, CDH was identified as insolvent per the August 2018 prudential returns submitted.<\/p>\n

CDH itself reported a negative capital adequacy ratio which was further adjusted downward by the BoG. The BoG also noted severe liquidity challenges which threatened the ability of the institution to operate.<\/p>\n

The institution\u2019s net worth of negative GH\u00a2171.36 million as of end May 2019 violated Section 28(1) Act 930. Also, its capital adequacy ratio of negative 35.90 per cent as of end May 2019 was in violation of Section 29(2) of Act 930.<\/p>\n

\u201c\u2026 Incomes on non-performing loans\/exposures were to be suspended until such time as the loans\/exposures became performing but CDH did not comply with this directive, resulting in an overstatement of its revenue and assets in the financial statements over several years,\u201d according to the report.<\/p>\n

The BoG extensively engaged the board and senior management on the need to inject additional capital into the company, and plans repeatedly submitted by CDH to the BoG to address supervisory concerns failed to materialise hence the revocation of its operational licence.<\/p>\n

CDH Savings and Loans Limited commenced operations in 2016 after taking over Ivory Finance Company Limited which had been operating since the year 2000.<\/p>\n

Commerz Savings And Loans <\/strong><\/p>\n

In the case of Commerz Savings and Loans Limited (formerly known as Sterling Savings and Loans Limited and part of Nordcom Africa Holdings Limited), its licence was revoked following persistent complaints by customers that the institution was unable to meet their withdrawal requests.<\/p>\n

It was licensed by the Bank of Ghana in December 2016 and commenced operations in February 2017.<\/p>\n

The BoG said after it reviewed the operations of Commerz Savings & Loans, it was found to be insolvent with an adjusted negative capital adequacy ratio with serious liquidity challenges.<\/p>\n

The BoG has since engaged the Board and Senior Management on the need to inject additional capital but that has not yielded any positive results.<\/p>\n

Commerz Savings & Loans\u2019 net worth of negative GH\u00a240.99 million as of end May 2019 violated Section 28(1) Act 930. The institution\u2019s capital adequacy ratio of negative 126.15 per cent as of end May 2019 violated Section 29(2) of Act 930.<\/p>\n

Among factors that pushed for the revocation of its licence were the serious liquidity challenges that caused the inability of the institution to meet withdrawal demands of its customers; high and increasing non-performing loans (NPLs) ratio due to poor credit underwriting standards; weaknesses in risk management oversight resulting in poor investment decisions.<\/p>\n

BY Samuel Boadi<\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Mr. Martin Asamoah, Executive Director of CDH Savings & Loans and Dr Edem Bart Williams, CEO, Commerz Savings And Loans CDH SAVINGS and Loans Limited, one of the 23 institutions whose licences were revoked recently, was over exposed to its affiliate companies to the tune of 319 per cent, contrary to the regulatory limit of […]<\/p>\n","protected":false},"author":1,"featured_media":693108,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-693107","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\nCDH Was Over Exposed To Affiliates - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/08\/27\/cdh-was-over-exposed-to-affiliates\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"CDH Was Over Exposed To Affiliates - 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