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LBDI Rubbishes Media Reports of Insolvency
Date Uploaded: Jan 15, 2014

 

Economy-Banking

 

LBDI Rubbishes Media Reports of Insolvency

By Prince Nagbe

 

MONROVIA, Jan. 14 (LINA) – Liberia Bank for Development and Investment (LBDI) president John Davies has assured investors, shareholders, customers and the Liberian people that LBDI remains “strong, viable, solvent and compliant with financial rules governing banking in the country.

Davies was reacting to publications in the Monday, January 13, 2014 editions of the News and Concord Times newspapers captioned: “NEAR INSOLVENCY: SERIOUS FINANCIAL CRISIS HITS LBDI” and “LBDI ON THE VERGE OF INSOLVENCY?”

In a press statement issued Tuesday, he said the publications were loaded with a “barrage of misinformation intended to cause panic and to create confidence crises for not only LBDI but for the entire banking sector of the country”, referring to the newspapers as “detractors”.

Mr. Davies said what is even more disturbing is the failure of the papers to follow the principle of balanced reporting and professional journalism requiring they contact the management of the Bank to ascertain the facts.

The LBID boss said the newspapers failed to also take note of the financial soundness indicators returns of the Central Bank of Liberia, which are available and speak to insolvency of any bank.

Davies noted that in banking terms, a bank is insolvent when it can no longer meet its financial obligations to its depositors or lenders as payment becomes due, something which is not the case with the LBDI as the articles tend to suggest.

According to Mr. Davies, LBDI’s minimum reserve holding at the CBL as of December 31 was US $23.71 million and LD $1.29 Billion, while the LBDI’s minimum liquidity ratio as of December 31 is 47 percent, surpassing the 15 percent ratio set by the CBL and reflecting a liquidity surplus of 32 percent.

He further disclosed that LBDI has a Capital Adequacy Ratio (CAR) of 19 percent surpassing the 10 percent requirement of the CBL and reflecting an excess of 9 percent, while its offshore cash position as at December 31, 2013 is US $53.5 million, indicating a growth in its Balance Sheet of 17 percent.

He assured investors, depositors, shareholders, stakeholders and the general public that LBDI has remained financially sound and vibrant since its 49 years of existence in Liberia.

According to Davies, LBDI will pursue all legal means to dispel the false rumors being published by some media institutions against the LBDI.

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