Indigenous bank UniBank’s sponsorship deal with Black Stars is likely to hit the rocks after the rapidly growing financial institution was declared insolvent by the Bank of Ghana on Tuesday.
UniBank renewed its partnership agreement with the Ghana Football Association by signing a three-year-deal worth US$ 1.2m in November 2016.
According to the Bank of Ghana, the headline sponsor of the Black Stars among other things, persistently maintained a capital adequacy ratio (CAR) below zero (currently negative 24%), making it technically insolvent prompting it to mandate audit firm KPMG to administrate the firm and save it from pending collapse
The bank’s action 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.
Black Stars to lose another headline sponsor in UniBank Ghana
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