Sierra Leone’s central bank has closed the country’s only privately owned indigenous bank, declaring it insolvent after years of regulatory intervention and unsuccessful recovery efforts.
The Bank of Sierra Leone announced that Union Trust Bank (UTB), a 31-year-old financial institution, no longer met the legal requirements to operate as a licensed commercial bank.
Governor Ibrahim Stevens said the decision followed extensive supervisory measures over the past five years aimed at restoring the bank’s financial health.
“UTB no longer satisfies the statutory conditions required for a commercial banking licence,” Stevens told reporters.
Under a purchase-and-assumption agreement approved by regulators, Rokel Commercial Bank, which is majority-owned by the state, has acquired the failed lender’s assets and liabilities.
The move effectively brings an end to one of Sierra Leone’s best-known indigenous financial institutions and further expands the presence of the state-backed bank in the country’s banking sector.
The closure, however, sparked an immediate backlash from UTB shareholders, who described the action as premature and unnecessarily severe.
In a statement, shareholders challenged the central bank’s assessment of the bank‘s financial position, insisting they had already secured sufficient capital to recapitalise the institution through a local investor.
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According to the shareholders, documentation confirming the capital injection had been submitted to regulators before the closure was announced.
They argued that the bank should have been allowed to continue operating under new ownership arrangements rather than being shut down.
Shareholders have also sought legal intervention to challenge the regulator’s actions, although they say court proceedings have yet to make significant progress.
The central bank has maintained that the decision was necessary to protect depositors and preserve confidence in the country’s financial system.
The closure highlights the challenges facing some financial institutions in Sierra Leone, where regulators have intensified efforts to strengthen banking sector stability and ensure compliance with prudential requirements.
The acquisition by Rokel Commercial Bank is expected to provide continuity for customers and minimise disruption to banking services as authorities oversee the transition.
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Union Trust Bank was established in 1995 and had grown to become Sierra Leone’s only privately owned indigenous commercial bank before its closure.
