The liquidity situation at the SIB Bank appears to be casting a dark shadow over financial institutions in the country and the economy as a whole if it is not handled with immediate care.
By Othello B. Garblah
Monday, July 1, 2024- Despite mounting pressure from the Executive Branch of Government on the Central Bank of Liberia to save SIB Bank from bankruptcy, the bank finds itself in deeper trouble than it appears to the naked eye.
SIB, whose full name is Sapelle International Bank Liberia Limited (SIBLL), formerly GN-Bank Liberia Limited (GNBLL), is currently on a banking life support program from the CBL known as the Emergency Liquidity Assistance (ELA) to rescue it from declaring insolvency.
SIB Bank is currently in an overdraft of 7.5 million besides several other liabilities.
As of May 17, 2024, SIB had a total liability of US$23,084.751, which includes the National Social Security and Welfare Corporation (NASSCORP) deposits of US$8.4 million, deposits from other customers, including the National Port Authority, and other liabilities amounting to US402950.
The amount represents the legacy loans, advances, and deposits assumed by GNBLL/SIBLL from the defunct First International Bank (FIB) under the Purchase and Assumption Agreement signed on June 1, 2016, and subsequently amended on June 6, 2026.
Based on the Purchase Agreement, these loans and advances were considered to hold a high prospect of recovery.
However, despite the high expectations, the situation at SIB took a nosedive and reached its zenith in 2023, forcing the Bank to write CBL on March 5, 2023, informing it of its challenging financial conditions, which has affected its operations due to the liquidity issues.
Sources told this paper that the CBL’s decision to enroll SIBLL in its life support program follows several interventions from the Executive Mansion (the current regime) after GN Bank Group Head Dr. Paa Kwesi Ndoum met with President Boakai to help him secure his investment.
Thus, the CBL Board of Governors authorized Management to give liquidity support of US$8m to SIBLL on May 17, 2024, but with several conditions.
Among the conditions are that SIB will not be able to give out new loans until the ELA is clear, that US2M of the funding be used to settle the legacy liabilities, and that the balance of US6M be applied against the 7.5 million overdrafts, leaving a balance of US1.5 million in overdraft.
Other conditions listed are that SIB be given six months to bring in additional funds, that it provides CBL/RSD with a weekly report, that it conducts an audit of the legacy loan to determine recoverability, and that all legacy loans recovered shall be made to the CBL.
Some background
SIBLL, formerly known as GNBLL, was originally incorporated as First National Savings and Lonas (FNSL) Company Limited and licensed as a Savings and Loans Company on 8 May 2006 by the Bank of Ghana. The Bank of Ghana issued it a universal banking license on 4 September 2014 and renamed it GN Bank Limited.
On August 16, 2019, the Bank of Ghana revoked GN Bank’s savings and loans license on the grounds that it did not meet key prudential regulatory requirements (consistent with its new status) and was insolvent.
The Bank of Ghana concluded that GN was insolvent under section 123 (4) of the Banks and SDIs Act, 2016 (Act 930), breaching its key prudential regulatory requirements. Its Capital Adequacy Ratio (CAR) was -61%, a breach of the minimum requirement of 13%.
After the Bank of Ghana revoked its license, GNBLL changed its name to SIBLL here to reflect a new image.
