Fact-Check: UMB Bank is not facing financial troubles despite BoG advisor appointment

An announcement by the Bank of Ghana (BoG) appointing Dr. Joseph O. France as a Management Advisor to Universal Merchant Bank (UMB) has sparked rumours that the bank is facing financial difficulties.

However, the Bank of Ghana has assured depositors and customers that UMB remains open for business under its existing management team.

The appointment of Dr. France is intended to assist UMB in its recapitalization process and implementation of governance reforms agreed upon with the Bank of Ghana.

Dr. France will advise UMB’s management team, monitor their progress in raising additional capital, and oversee the implementation of the agreed-upon reforms.

It is important to note that an advisor, unlike an official administrator, does not take over the powers, responsibilities, and duties of the bank’s shareholders, directors, or management. Dr. France may attend meetings of the Board of Directors or Committees of the bank but cannot vote at such meetings.

The Bank of Ghana has granted forbearance to all banks in Ghana as a result of the impact of the Domestic Debt Exchange Programme (DDEP) on capital. Banks have been given up to the end of 2025 to fully recapitalize.

Banks across the country were given up to the end of September 2023 to provide their recapitalization plans which required that banks whose capitals were below the minimum capital requirement quickly built it up to GH¢400 million as proposed by the Central Bank.

Over half of the country’s 23 banks have already fully met the new capital requirement. Others have made significant progress, reaching over two-thirds of the target within the three-year period.

This demonstrates progress in meeting regulatory requirements and increasing the financial soundness of the banking industry as the 2025 deadline approaches.

The fact is, the appointment of Dr. Joseph O. France as an advisor to UMB is not a sign that the bank is facing financial troubles. It is part of a process put in place by BoG to finalise the recapitalisation process that was earlier put in place.

The Bank of Ghana is committed to promoting a sound and efficient banking sector and is working with UMB to ensure that the bank remains strong and healthy.

Meanwhile, the Board of UMB has acknowledged the appointment of Dr. Joseph O. France and indicated it is “appreciative to the Bank of Ghana for the effort to support the Bank with the appointment of Dr. France” for the Bank’s recapitalisation drive.

The Board in a statement further assured customers of UMB, all other stakeholders and the general public that the Bank is “resilient and resolute with an unwavering commitment to continue to work in their best interest.”

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