The impact of the high Non-Performing Loans (NPLs) on the books of commercial banks is set to reduce by the close of this year.<\/p>\n
[contextly_sidebar id=”J1bB3faZ5t0yLUtqnIxoIukKeb7PFkdr”]At least this is the confidence expressed by some managers of banks.<\/p>\n
The latest financial stability report by the Bank of Ghana showed that the NPL\u2019s of commercial banks have increased by as high as 69.4 percent between July 2015 and July 2016.<\/p>\n
The figure has shot up from GH\u00a2 3.6 billion to GH\u00a2 6.1 billion between the one year period.<\/p>\n
This also translated into an NPL ratio of 19.1 percent, up from 13.1 percent a year earlier.<\/p>\n
But the Managing Director of HFC Bank, Robert Le Hunte maintained that the situation will turnaround by the end of the year.<\/p>\n
\u201cWe think by the end of this year those things will be behind us; we are all aware of some of the industries that have not been performing in the energy sector and that have affected our performance,\u201d he stated.<\/p>\n
Mr. Le Hunte added, \u201cWe are going to be moving onto greater level of profitability\u2026there have been a lot of changes in HFC and a lot of good things but the one thing that has not been transformed this year is our profitability.\u201d<\/p>\n
The huge NPLs on the books of banks also come despite appeals by the central bank for banks to adopt best practices of correcting the challenges.<\/p>\n
As a result, commercial banks including the HFC have also resorted to international systems to reduce the impact of the bad loans.<\/p>\n
\u201cIf you take out the level of provision that we have had to add this year as a result of the increasing NPL, the bank would have then realized a very nice profit but over the last few years the bank has been taking and that is what has resulted in our reduced profitability over the last years,\u201d Robert Le Hunte added.<\/p>\n
Recent developments in the energy sector have contributed to the non-performing loans on the books of some commercial banks.<\/p>\n
The Volta River Authority is indebted to about 19 banks to the tune of 4.4 billion cedis.<\/p>\n
Efforts geared at addressing this included government\u2019s decision to restructure the debts and convert them into long term maturing entities, payment which started in August 2016.<\/p>\n
The President of the Ghana Association of Bankers, Alhassan Andani in a recent interview also announced that government had effected payments for the first week of September 2016.<\/p>\n
The Bankers\u2019 Association is also hopeful government will abide by the plan outlined and agreed to by all interested parties.<\/p>\n
–<\/p>\n
By: Pius Amihere Eduku\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"
The impact of the high Non-Performing Loans (NPLs) on the books of commercial banks is set to reduce by the close of this year. [contextly_sidebar id=”J1bB3faZ5t0yLUtqnIxoIukKeb7PFkdr”]At least this is the confidence expressed by some managers of banks. The latest financial stability report by the Bank of Ghana showed that the NPL\u2019s of commercial banks have […]<\/p>\n","protected":false},"author":14,"featured_media":210287,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32,171,11],"tags":[],"yoast_head":"\n