The latest Banking Sector Stability Report by the Bank of Ghana has shown that Non-Performing Loans (NPLs) of banks increased by 36.17 %\u00a0between February 2016 and the same period this year.<\/p>\n
[contextly_sidebar id=”Jd1jA4Nqc3mgYDNifKVVd1Ywh7EdfpON”]The figure increased from 4.7 to 6.4 billion cedis within the twelve months’ period.<\/p>\n
The report also revealed that commerce and finance accounted for the highest non-performing loans of banks.<\/p>\n
According to the report, “the high NPLs continue to pose upside risks to the banking industry, despite the marginal decline in the energy-sector related debt exposures.”<\/p>\n
This also led to a higher NPL ratio of 17.7 per cent in February 2017, compared with 15.6 per cent in the same period last year.<\/p>\n
The deterioration in asset quality was largely attributed to the Asset Quality Review of bank loans in 2016 which led to the downgrade of some existing loans by banks.<\/p>\n
The NPL ratio of 17.7 per cent for February 2017, is however an improvement over the January 2017 NPL ratio of 18 per cent.<\/p>\n
Adjusting for the fully provisioned loan loss category, the NPL ratio was 8.6 per cent in February 2017, against 7.6 per cent in February 2016.<\/p>\n
Contributors to the high non-performing loans included Commerce & Finance with 39.7%.<\/p>\n
This is followed by services and the Electricity, Gas & Water sectors with 13.6 and 10.1% respectively.<\/p>\n
The three sectors represented 63.4 per cent of the total NPLs of the banking sector.<\/p>\n
Meanwhile the industry\u2019s NPL ratio is expected to improve following the conclusion of restructuring arrangements for the industry\u2019s exposure to the Bulk Oil Distribution Companies (BDCs).<\/p>\n
Also, as government continues to pay down the energy-related State-Owned enterprises (SOEs) debts according to the agreed quarterly schedule, banks\u2019 exposure to the energy sector will decline.<\/p>\n
This, together with additional efforts by banks to tighten credit risk management practices and intensify loan recovery efforts, particularly for large non-oil related exposures, could lead to further reduction in the NPL ratio.<\/p>\n
–<\/p>\n
By: Pius Amihere Eduku\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"
The latest Banking Sector Stability Report by the Bank of Ghana has shown that Non-Performing Loans (NPLs) of banks increased by 36.17 %\u00a0between February 2016 and the same period this year. [contextly_sidebar id=”Jd1jA4Nqc3mgYDNifKVVd1Ywh7EdfpON”]The figure increased from 4.7 to 6.4 billion cedis within the twelve months’ period. The report also revealed that commerce and finance accounted […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[121,32,171,11],"tags":[],"class_list":["post-312323","post","type-post","status-publish","format-standard","hentry","category-banking-and-finance","category-business","category-local-economy","category-top-stories"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/312323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=312323"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/312323\/revisions"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=312323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=312323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=312323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}