March 20, 2018 / 6:23 PM / a month ago

UPDATE 2-Ghana central bank places Unibank in administration

* Lender says will seek arbitration to reverse takeover

* Action brings to three Ghanaian banks taken over in 8 months (Adds Unibank response)

By Kwasi Kpodo

ACCRA, March 20 (Reuters) - Ghana’s central bank has appointed accounting firm KPMG as administrator for Unibank to save it from imminent collapse, Governor Ernest Addison said on Tuesday.

The move, which follows central bank liquidations of two other local banks last year, will prevent losses to depositors and other creditors and ensure it does not create further risks to the wider financial system, Addison told reporters.

Ghanaian-owned Unibank had suffered persistent cash shortfalls and regularly fell below cash reserve requirements, he said.

“As a result, Unibank has relied extensively on liquidity support - over 2.2 billion cedis ($498 million) - from the Bank of Ghana over the past two years to meet its recurring liabilities,” he said.

Apart from poor governance and risk-management practices, Unibank was also found to have misreported the state of its loan book, Addison said.

Unibank will remain open for business under the management and control of KPMG, with oversight provided by the Bank of Ghana, until it is judged stable and can be returned to private ownership, he added.

Managers of the bank told Reuters they would seek to reverse the takeover, saying the central bank did not meet the requirement to notify them before announcing the takeover.

“We intend to go for arbitration,” said Dominic Ayine, a legal adviser to Unibank. ($1 = 4.4165 cedis) (Reporting by Kwasi Kpodo Editing by Alexander Smith and David Goodman)

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