Construction Bank, an indigenous financial institution focused on supporting the construction sector, has started the process of voluntarily winding-down its operations.
The decision to wind-down was taken by the bank’s shareholders and Board of Directors after an exhaustive analysis of its position and the general banking landscape in the country.
B&FT sources at the central bank disclosed that all relevant documents in respect of the exercise have been duly submitted to the regulator for approval.
Based on the documents submitted to the central bank, all funds of depositors are safe and secure. Staff welfare during and after the exercise have also been addressed in the ‘winding-down plan’ submitted to the regulator. Sources say the exercise could be completed in a month once approval is given.
Construction Bank’s Head Office branch at the Octagon-Central Business District, Accra, will remain open to all customers that require additional information and assistance. Customers of the bank are also being notified about the imminent changes.
All official business transactions of the bank are expected to continue till a final wind-down date is communicated.
Construction Bank was officially launched in June 2017 with a clear intention of providing banking services in project finance, commercial and consumer banking – with a key focus on construction, infrastructure and mortgage financing.
It was lauded for its pioneering role, given the absence of a construction-focused universal bank at the time of its launch.
On-going banking sector reforms
Universal banks in the country have had to adjust to on-going reforms in the banking sector. These include an increase in the minimum capital from GHȼ120million to GHȼ400,000; new corporate governance directives; adjustment to the Basel II and III framework which aims at prudent capital regulation, supervision and market discipline; and the up-coming cyber security directives among others.
Banks are currently going through a lot of stress as the central bank tries to sanitise the industry, but Country Senior Partner at PricewaterhouseCoopers (PwC), Vish Ashiagbor, believes all parties stand to benefit at the end of the day.
“There certainly will be a level of stress, but it is a balance. The idea is to show the banks how to manage these risks better – whether external or otherwise.
“If you look at the history of our banking industry, you see some of the banks often waver whenever an external factor hits us – all of this is designed to strengthen the banks. Yes, there will be some stress because you have to make adjustments from what you are used to. But the ultimate goal is to have a stronger industry that benefits all of us,” Mr. Ashiagbor told the B&FT in an earlier interview.