“We are in a very good political environment” – Nduom speaks on the restoration of GN Bank licence

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Papa Kwesi Nduom

Papa Kwesi Nduom has broken his silence following the restoration of the licence of GN Savings and Loans, formerly known as GN Bank.

According to Papa Kwesi Nduom, Ghana is now in a very good political environment, adding that with the wind of restoration of their license, they are ready to play their role for Ghana to achieve the prosperity it needs.

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Speaking to the media following the Court of Appeal has, by a unanimous decision, restored the licence of GN Savings and Loans Company Limited, Papa Kwesi Nduom stated, “We are in a very good political environment. That environment has brought about a wind of change, and with our licence now restored, we are ready to play our part in ensuring that this country achieves the level of prosperity it needs”.

His comments follow, the Bank of Ghana (BoG) have been ordered by the Court of Appeal to restore the licence of GN Bank.

The appeal court ruling follows an earlier High Court ruling that upheld the revocation of the financial institution’s operating licence.

The Court of Appeal three-member panel directed that all assets of the bank be returned to its original owners.

The receiver has also been ordered to hand over management of the company to its previous management team.

The Court of Appeal ruling marks a major development in the long-running legal battle between GN Bank and the Bank of Ghana.

GN Bank, which officially commenced operations in 1997 as First National Savings and Loans (FNSL) Company Limited, was upgraded to a universal bank on September 4, 2014.

It expanded rapidly across the country, establishing one of the largest branch networks in the banking sector.

The central bank, however, at the time argued that its regulatory assessments revealed that GN Bank’s expansion was not supported by adequate capital buffers and sound risk management practices.

BoG discovered that GN Bank regularly breached key prudential requirements, including capital adequacy and liquidity ratios.

Also, the BoG, in its statement, showed high levels of non-performing loans (NPLs), significant exposure to related-party transactions, and poor corporate governance structures, which weakened the bank’s financial position over time.

Reports suggest that despite several directives and corrective measures issued by the BoG, comprising capital restoration plans and restrictions on certain banking activities, GN Bank was incapable of raising the required additional capital or restructuring its operations to restore solvency.

The bank was deemed severely undercapitalised and technically insolvent, prompting the BoG to ask the bank to downgrade to a savings and loans company, using the name GN Savings and Loans Company Ltd.

GN Bank’s license was then revoked in 2019 as part of the central bank’s efforts to protect depositors’ funds and stabilise the country’s financial sector.

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