Bank failures in Ghana. A case study on the collapse of the UT bank

By Project Professional Ghana

Full Chapter

The study assesses bank failures in Ghana. A case study on the collapse of the UT bank. The main data collection instrument used was the annual financial statements for 4-year data from 2011 to 2014 on the UT bank and macroeconomic indicators. The various variables that will be considered include the interest rate, exchange rate, inflation rate, return on asset, return on equity, total debt on the total asset, total asset or firm size, short-term debt, and long-term debt from 2011-2014. The data were analysed using Statistical Package for Social Sciences (Version 26) software and presented using descriptive tables. The findings revealed that the failure of UT bank can also be attributed to poor economic performance. That is, the Return on Assets and Return on Equity of the UT bank are positively influenced by interest rate, exchange rate, and inflation rate during the period of study. The study recommends that the Bank of Ghana should empower the Ghana Association of Bankers to peer-regulate its registered members to complement the Supervision Department of the Bank of Ghana. This will ensure that the banks self-check their activities to prevent reckless expenditures that can lead to higher liquidity.