{"id":312323,"date":"2017-04-20T05:50:50","date_gmt":"2017-04-20T05:50:50","guid":{"rendered":"http:\/\/citifmonline.com\/?p=312323"},"modified":"2017-04-20T05:50:50","modified_gmt":"2017-04-20T05:50:50","slug":"non-performing-loans-increase-by-36-in-february-2017","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2017\/04\/non-performing-loans-increase-by-36-in-february-2017\/","title":{"rendered":"Non-Performing Loans increase by 36% in February 2017"},"content":{"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.<\/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":[],"categories":[121,32,171,11],"tags":[],"yoast_head":"\n