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The results of a BoG study confirm what GN Bank stakeholders have maintained all along, that extraordinary circumstances engineered by others, led to the closure of the bank with the largest footprint in Ghana. Officials of the bank have told of the fact that GN Bank was one of the most liquid banks in the country due to innovative products and a solid national retail network.
The Today newspaper’s investigations have discovered the results of diagnostic studies commissioned by the Bank of Ghana (BOG) in 2015. The results were reviewed by BOG Supervision Department officials and confirmed during the first quarter of 2016. BOG wrote to GN Bank that the results of the study showed that “…your bank was assessed to hold adequate provision for your financial exposures.” The diagnostic study into the loans and investments of banks in the case of GN Bank was performed by the international accounting firm Ernst & Young.
What is intriguing is that while GN Bank was adjudged to be in good shape, a number of other banks were consider unsafe, their foundation shaky due to huge bad loan burdens and inadequate provisioning. Strangely enough a number of these banks are still operating as “well run” banks while GN Bank’s license has been received by the BOG.
The question is what happened after 2016? What destroyed GN Bank? Experts consulted by Today newspaper, point to the freezing of government infrastructure projects the halting of payments for certified projects. This made loans to government contractors go bad, and as default rates rose, the liquidity situation of not only GN Bank but other financial institutions suffered.
Source: Today Newspaper
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