Union Trust Bank (UTB) has been placed in resolution by the Central Bank of Sierra Leone, barely 3 months after the death of its CEO and pioneer, Dr James Sanpha Koroma COOR (1946-2025). Permit me, fellow Sierra Leoneans, to make a few reflections, hoping these will guide the future.
In banking and finance, a central bank puts a commercial bank into resolution, meaning that the bank’s financial situation has become critical, and the central bank steps in to minimise potential disruptions to the financial system and protect the bank’s depositors while maintaining relationships with counterparties and other clients. This usually happens when the bank is deemed insolvent or likely to fail or destabilise the financial system.
BSL’s resolution framework for UTB has made Rokel Commercial Bank the acquiring institution. During the undefined period of transition to full incorporation, BSL might want to consider the following:
i. UTB is a household name with a network of urban and rural branches, some in areas other banks are scared to operate. This spread has significantly enhanced financial inclusion in remote parts of the country.
ii. An option, therefore, to keep UTB’s name and identity, especially as it is a well-established and trusted bank in the country is compelling. This can help minimise disruptions and maintain customer confidence.
iii. The sudden death of Union Trust Bank’s (UTB) CEO and the subsequent resolution action by the Bank of Sierra Leone should raise eyebrows. It’s understandable to question the timing and process, especially given UTB’s significance as Sierra Leone’s only private indigenous commercial bank.
Read Also: A Call for Action over the UTB Issue
iv. The central bank’s role in supervising and regulating commercial banks is crucial, and it’s natural to wonder if they could have done more to prevent this situation. Some possible alternatives the central bank could have explored include recapitalisation, restructuring, and comprehensive risk assessment analysis for the public as an early warning.
v. Finding a suitable partner to support UTB’s operations toward full restoration of the bank’s financial health.
vi. The Bank of Sierra Leone’s swift action may be aimed at maintaining financial stability and protecting depositors’ interests. However, Transparency and accountability are essential in such processes.
vii. It’s worth noting that UTB has a strong presence in Sierra Leone, with a wide network of branches and a reputation for innovative banking services. Finally, as the journalist Mr Thomas Dixon lamented, “many see this move as a betrayal of the legacy of a central bank Governor”. What good would it be for a country to wipe out the legacy of a towering figure in banking, financial and public sectors soon after his death?
The UTB speedy ‘in resolution’ and its ultimate incorporation into another commercial bank, which is about 65% owned by the government, may have wider and longer-term implications for customers, employees, and the broader financial sector as well as potential indigenous investors in other sectors. I am hoping also the Rokel Bank’s acquisition of UTB meets the prior approval of both government and other shareholders (35%).
©️Samura M. W. Kamara
