Adnan Adams Mohammed
Ghana’s banking sector recorded a heightening credit risks in the first half of the year.
According to Bank of Ghana data, the industry’s non-performing loans ratio was 24.1 percent in June 2024, up from 18.7 percent in June 2023. Representing more than 5 percent rise in NPLs.
Although, not directly related to credit risk, but a worrying trend in the banking sector is total monetary value lost to fraud. Cases recorded increased by 21% in 2023 to GH¢63 million compared to GH¢52 million in 2022. The number of staff involved in these fraudulent activities in Banks and SDIs rose from 188 in 2022 to 274 in 2023, representing an increase of 46%. This erodes depositors confidence which eventually affects banks funds available for lending.
“Elevated credit risks pose threats to the recovery process,” Bank of Ghana Governor, Dr Ernest Addison has warned while speaking at the annual general meeting of the Ghana Association of Banks in Accra, last week. “This is despite improved performance of the sector.”
“The consistent rebound in profits, adherence to recapitalisation plans, and enforcement of strict credit underwriting standards are expected to help ensure that banks remain on the path to full recovery and resilience,” he added.
“Enhanced performance of the banking sector, amid the obvious challenges, was made possible in part through the unrelenting partnership of GAB with the Bank, especially during the difficult DDEP process.”
The Governor urged the association to reflect on the recent developments in the banking sector, strategise to consolidate the gains made and aim to sustain confidence in the industry for economic growth.
