In May 1990, the Government of Abu Dhabi and related institutions became BCCI’s controlling shareholders, acquiring just over 77% of the Bank. This came at a time when serious financial problems, particularly substantial problem loans and concealed losses, had been identified.
The restructuring plan, developed with Price Waterhouse and discussed with BCCI’s College of Supervisors, proposed three separately capitalised and regulated banks in London, Abu Dhabi and Hong Kong, with problem assets transferred to a separate recovery operation. It also involved:
- moving Central Office functions from London to Abu Dhabi
- management changes
- branch consolidation
- significant staff reductions
The Bank of England accepted the three-bank structure in principle in November 1990, and the major financial support arrangements were signed in May 1991.
Abu Dhabi continued its support until immediately before closure. On 4 July 1991, a further US$650 million was remitted. BCCI was closed the following day, 5 July 1991, while the restructuring and recapitalisation programme was still in progress.