In August 2017, Mr Affram said GCB Bank absorbed total deposits of GH?2.3 billion from the two banks but by December 2017 — four months after the purchase and assumption — it had lost about GH?1 billion to panic withdrawals.

The situation exerted undue pressure on the bank’s finances, forcing it to liquidate almost all of its interbank investments to be able to contain the ‘heat’, Mr Affram said.

GCB Bank also had to fall on the Bank of Ghana (BoG) for liquidity support to the tune of GH?400 million to be able to meet withdrawals, the DMD told stock market analysts and the media on May 23.

He said the loss was in spite of assurances from the central bank that customers needed not to rush into withdrawing their deposits from the absorbing bank — GCB Bank, Mr Affram said on May 23.

“If you scrutinise our published reports, you will notice that in the quarters prior to the assumption, we had a substantial amount of interbank investments and as a bank, because of these heavy withdrawal, we had to liquidate all our investments in that space,” he stated.

“We had to go to the central bank to tell them we were bleeding too much from the process. So we borrowed GH ?400 million from them,” he noted.

Subsequently, he said, the bank was able to mobilise some deposits and tapped into some of the businesses they took over, especially in the area of trade.

Toxic loans

Mr Affram also downplayed concerns that GCB Bank took over bad loans from the two banks, stating that the bank did not take over all the loans.

“In terms of loans, people were afraid GCB had gone to take toxic loans but that was not the case.

Even with the deposits, not all of them were taken over by the bank because some of them were fictitious and also with the loans, we selected a few,” he explained.

“From the very onset, we took over about GH?75 million and then in the course of time as we engaged some of the customers and their business models, we brought on board an additional GH?75 million so in total, the loan assets we took from UT and Capital was not more than GH?150 million,” he emphasised.

In effect, he said, the contribution of the two banks to the assets of GCB were paid for by a bond of about GH?2.2 billion.

420 staff laid off

In total, he said, the bank had to lay off 420 staff out of the 850 it inherited from the two banks.

He said that followed the rationalisation of the branches that it took over which were reduced from 53 to 22.

“Between UT and capital, we had regular staff of about 850 from day one and we worked with this number until February 2018 and that was when we pruned it down to 550 due to the rationalisation of the branches,” he explained.

“We assumed 53 branches and we settled on 22 so about 300 staff had to leave. About 120 also had to leave later because their documents did not meet our requirements,” he added.

Mortgage business

The Managing Director of GCB, Mr Ray Sowah, explaining why the bank had still not commenced its mortgage business, said government was providing it with some concessionary lending to support the mortgage business and that was what was delaying the take-off of the business.

“We have not taken off fully because the modalities from government have not been fully completed so once the modalities are completed,we will roll it out,” he said.

“Latest by July, we should be able to take off but a lot is dependent on the modalities being completed by government with which we are going to work with,” he added.