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Sports News of Tuesday, 20 March 2018

Source: GHANAsoccernet.com

Black Stars to lose headline sponsor as uniBank is declared insolvent

Unibank's sponsorship deal with Black Stars hangs by a thread after the indigenous bank was declared insolvent by the Bank of Ghana on Tuesday.

In November 2016, Unibank renewed its partnership with the Ghana FA by signing a three-year-deal worth US$ 1.2m.

The Bank of Ghana has appointed audit firm KPMG as Official Administrator aimed at saving UniBank from imminent collapse.

Unibank among other things persistently maintained a capital adequacy ratio (CAR) below zero (currently negative 24%), making it technically insolvent.

It contravenes section 29 of Act 930 which requires a minimum CAR of 10% to be maintained at all times.

Also, they persistently suffered liquidity shortfalls and consistently breached its cash reserve requirement.

As a result, UniBank has relied extensively on liquidity support (over GHS 2.2 billion) from the Bank of Ghana over the past two years to meet its recurring liabilities.

Among other things, a key shareholder of the bank managed to obtain liquidity support from the Bank of Ghana using third party banks as its agents.

The Bank of Ghana’s exposure to the bank was therefore underestimated by nearly GHS 400 million, as this amount was not reflected in its books.