IB Bank up for sale?

The International Bank Liberia Limited is regarded as one of the top-performing banks in the Liberian economy. News of it being put up for sale amid a huge loan portfolio questions the management of the bank.

Monrovia, July 29, 2024 -Despite its booming transactional activities, the situation at the International Bank Liberia Limited (IBLL), formerly known as International Trust Company (ITC), doesn’t appear to look good, according to a leaked Crowe Liberia LCC latest audited financials for 2022.

The New Dawn newspaper has learned that this has prompted shareholders to put the bank up for sale at US20 million, representing their capital.

“An offer in the region of USD19.7m – USD21m would be acceptable to the current majority shareholder, Liberia Financial Holdings Ltd,” the 2022 acquisition brief stated. “The next steps include: – A letter of intent to the current owner stating the intention to purchase their shares and request for due diligence to cover a 90-day period,” the acquisition brief added.

The period under review covers the stewardship of outgoing General Manager Mr. Henry Samoa, the presumptive Executive Governor designate to take over at the Central Bank of Liberia.

According to the 2022 Acquisition Brief, IB Bank’s total assets stand around US$177.7 million, while its liability is a little over US$157.7 million.

A brief look at the bank’s financial snapshot during the period under review shows that its cash and cash equivalent investment was around US46.7 million, while investment was a little over 14.1 million.

Loans and advances to customers were over US$96.8 million, while property, plant, and equipment were a little over US$4.7 million. Intangible and tangible assets accounted for US804,343, while right-to-use assets were a little over US9.8 million, bringing the total assets to a little over US$177.7 million.

On account of liabilities, deposits from customers are over US121.9 million, while account payable was calculated at over 8.1 million. According to the Crowe report, deferred tax liability was at US$357 894, while lease liabilities and operating leases were put at US$936,934. Current income tax liability stood at US156,644, while borrowings were at US23.6 million as of the audit. Other liabilities are calculated at US2.4 million, bringing total liabilities to US157.7 million.

During the same period under review, the bank reported a profit after tax of LRD221.9m/USD1.450m for 2022. The Capital Adequacy Ratio (CAR) for 2022 was 14.10%, against the required 10%.

The report said, “With total assets of USD177m and capital of USD20m, the bank is well placed as a healthy financial institution in a challenged economy.”

But financial experts disagree.

According to one expert, the amount of cash and cash equivalent investment is US46.7 million compared to customers’ deposits, which are over US121.9 million. Should 60% of customers come forward to withdraw their deposits, the bank will automatically collapse.

Another expert told this paper that IB Bank’s exposure is risky. With US96. 8 million in loans and advances to customers, it puts the bank in danger. In expanding on his analysis, the expert drew a comparison between the GN Bank and First International Bank. During the purchase of FIB, GN Bank inherited the former’s huge loan portfolio. Many of the loans turned out to be non-performing, and ISB, which took over from GN Bank, is now in the face of liquidation.

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, 2016.

Brief Historical backgrounds

International Bank Liberia Limited, formerly known as International Trust Company (ITC), is a private commercial bank

incorporated and domiciled in Liberia with its registered office at Tubman Boulevard, between 11th & 12th Streets, P.O. Box 10-292, 1000 Monrovia 10 Liberia.

International Trust Company (ITC) was established in 1948 by an act of the Legislature to manage the Liberian maritime program.

ITC opened its commercial banking operation department in 1960 to handle customers’ accounts, money transfers, and credit facilities. In 2000, it became a standalone commercial bank, adopting the name International Bank Liberia Limited after the Central Bank of Liberia granted it a banking license.

The bank’s principal activity is providing banking and other financial services to corporate and individual customers.

These include granting loans, foreign exchange operations, deposits, wire transfers, and remittance services.

The bank currently operates 10 branches, 2 full-service outlets, and 2 money remittance outlets across Liberia. The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and are in line with the Prudential Regulations of the Central Bank of Liberia. -Writes Othello B. Garblah