Bloom Bank Exposed

Bloom Bank has come under intense scrutiny following revelations of serious financial and regulatory breaches as alleged. A recent report has raised red flags regarding the bank’s failure to comply with statutory liquidity requirements, cash reserve obligations, and internal asset management protocols that pose significant risks to its operational stability and financial integrity.

One of the most alarming findings in the report is Bloom Bank’s failure to meet the minimum cash reserve and liquidity thresholds mandated by the Bank of Sierra Leone. The bank’s cash reserve ratio was recorded at 11%, which is below the 12% minimum requirement. Additionally, its liquidity ratio stood at 54%, far lower than the 75% threshold stipulated by the Banking Act of 2019.

These liquidity deficiencies raise serious concerns about Bloom Bank’s ability to meet its financial obligations, including withdrawals, loan disbursements, and other essential banking services. Maintaining adequate liquidity levels is critical for financial institutions to ensure stability and prevent disruptions that could erode customer confidence. The failure to comply with these fundamental banking regulations suggests weaknesses in risk management and internal controls.

Beyond liquidity challenges, the report highlights financial irregularities in Bloom Bank’s operational expenditures. Notably, the bank spent NLe1,808,093 on advertising without sufficient documentation to justify the transactions. This lack of transparency in financial reporting raises concerns about potential mismanagement of funds and non-compliance with corporate governance standards. Unverified expenditures of this magnitude suggest weak internal controls and potential vulnerabilities to fraud or unauthorized spending.

An equally troubling issue is the bank’s inability to verify physical assets recorded on its books. The report indicates that several assets belonging to Bloom Bank could not be physically located, casting doubt on the accuracy of the bank’s asset records. Furthermore, the bank failed to provide evidence of its mandatory bi-annual physical asset verification, a crucial internal control measure designed to prevent asset mismanagement, financial misstatements, and potential losses.

Proper asset management is essential for maintaining financial accuracy and safeguarding institutional resources. The absence of regular verification raises questions about whether assets are being properly accounted for or if there is a risk of misappropriation. Such lapses can have significant implications for the bank’s financial reporting, investor confidence, and overall regulatory compliance.

The cumulative effect of these violations underscores broader governance and compliance issues within Bloom Bank (SL). Non-compliance with regulatory liquidity and cash reserve requirements could attract sanctions from the Bank of Sierra Leone, potentially leading to penalties or stricter oversight measures. Additionally, the lack of transparency in financial transactions and asset management deficiencies could expose the bank to reputational damage, investor skepticism, and customer withdrawals, further exacerbating its liquidity challenges.

To restore confidence and ensure long-term stability, Bloom Bank must take immediate corrective actions, including: enhancing liquidity management to meet and exceed regulatory thresholds; implementing stronger internal controls to prevent undocumented financial transactions; conducting thorough asset verification to ensure transparency and accountability and improving regulatory compliance to align with the Banking Act of 2019 and other financial laws.

The Bank of Sierra Leone, as the primary regulatory body, may need to intervene to ensure that Bloom Bank takes necessary corrective actions and strengthens its governance framework. The banking sector plays a critical role in the nation’s economic stability, and any institution failing to adhere to financial regulations must be held accountable to prevent systemic risks.

It could be recalled sometime back in November, 2024, Alusine Kargbo, a customer was issued a Bloom Bank cheque by Qcell and it was deposited at Rokel Commercial Bank, unfortunately it took one month before he was paid the money. The Managing Director had to apologise to him.

As the payment was overdue, Alusine Kargbo had to engage the MD In a whatsapp conversation the MD had this to say, ‘’Please let me clear this up as soon as possible sir. I am cleaning up my house so this issue does not repeat sir. Please I beg you sir. I know this looks bad and ask for your consideration as we fix our issues internally sir.’’

The general public has observed that many of the foreign banks take a long time to release money, most especially a cheque transfer payment.  This has frustrated so many customers. According to the banking regulation, a transfer is expected to mature within three working days.