SIB Liberia Limited (SIBL), a bank owned by a Ghanaian billionaire, is reportedly on the verge of insolvency, according to FrontPage Africa.
The financial troubles of SIBL are attributed to its acquisition of liabilities from the defunct First International Bank Liberia Limited (FIBLL), which has severely impacted its operations.
The difficulties began in 2020 when SIBL assumed approximately US$23 million in liabilities from FIBLL.
The bank settled US$14.7 million of these legacy depositors’ liabilities but has been unable to resolve the remaining US$8.5 million, leading to significant operational strain.
SIBL had appealed to the Central Bank of Liberia (CBL) to cover the outstanding amount, arguing that the debt should be the responsibility of the Liberian government and the central bank.
After a two-year review, the CBL board of governors approved the payment of US$8 million on May 17, 2024.
However, the payment had yet to be executed by the time of the report.
In the interim, the bank has faced a surge of customer withdrawals, exacerbating the financial instability.
Despite the central bank’s intervention to stabilize the situation, public confidence remains shaken, and customers have been flocking to branches to withdraw their funds.
SIBL has sought presidential intervention, highlighting the risk of severe damage to the financial sector if the situation is not addressed.
The bank’s management has emphasized maintaining public trust and sustaining operations amidst the crisis.
The Green Revolution of Liberia, a pro-democracy group, has raised concerns over the staggered payment of withdrawals, suggesting a liquidity crisis at SIBL.
The group’s inquiry revealed a US$8 million bailout documentation, but reports indicate that customers struggle to access their funds.
SIBL is not alone in facing financial difficulties; the International Bank Liberia Limited (IBLL) is also reported to be experiencing significant challenges.
The financial turmoil has heightened concerns among government officials and economic experts about the potential for a broader banking collapse.
Mounting pressure is on the Central Bank of Liberia to take decisive action to prevent further instability and restore confidence in the banking sector.
The future of SIB Liberia Limited and IBLL remains to be determined, with their recovery dependent on the effectiveness of measures implemented by the central bank and other financial stakeholders.
