The North Bank Evening Standard [TNBES]: Gambia: Central bank takes ‘full control’ of Nigerian-owned commercial banks

The CBG raised from D150 to D200 million, the minimum capital requirement for commercial banks operating in The Gambia. It is not clear if the two banks have fallen short of this regulation. Photo taken from Gambia.com

The Central Bank of The Gambia, CBG, Monday “take full control” of two Nigerian-owned commercial banks, Access (Gambia) Ltd and Keystone (Gambia) Ltd.

CBG announced it has exclusive powers to manage and control the two banks to ensure that they “operate in a safe and sound manner” but it did not make clear the reason behind the move.

The May 5 decision was taken under the Banking Act 2009, according to the CBG which states it wants “to safeguard the financial system in particular and the economy in general.”

It stated: “The two banks would continue business as usual, and depositors are assured that the banks have ample liquidity to meet current and future obligations.”

Last year, the CBG raised from D150 to D200 million, the minimum capital requirement for commercial banks operating in The Gambia. It is not clear if the two banks have fallen short of this regulation.

The Bank was among 10 banks that failed the CBN’s “stress test” conducted in June 2009, a manifestation that they would have struggled to withstand another financial crisis. (Photo Credit: MSJoof/TNBES/August2011)

Keystone Bank, formally of Platinum Habib Bank (known as Bank PHB Gambia Ltd) opened for operation in the tiny West African country in 2007.

Its parent bank, formed in 2005 by the merger between Platinum Bank Plc and Habib Nigeria Bank Plc., had its licence seized in 2011 by the Central Bank of Nigeria for failing to meet a new capital requirement.

The Bank was among 10 banks in Nigeria that failed the CBN’s “stress test” conducted in June 2009, a manifestation that they would have struggled to withstand another financial crisis.

Nigerian authorities said it was “very obvious” the affected banks were having difficulties pulling through the re-capitilaistion process and feared the banks would “go under”.

Bank PHB was taken over by Keystone Bank Nigeria Limited on August 6, 2011, and its Gambia-based subsidiary only changed its name in September last year.

The CBG in Banjul had claimed the change of ownership would have no bearing on the Bank’s operations as it is a locally incorporated entity.

Keystone Bank is a full service commercial bank with its head office in Lagos with over 200 branches in Nigeria and Africa.

Access Bank (Gambia) Ltd began operations in The Gambia in October 2006. It is owned 75 per cent by the Access Bank Plc. in Nigerian and 25 per cent by Gambian investors.

Written by Modou S. Joof