Ghana’s private sector still dominates with its share of non-performing loans in the banking sector.
The latest banking sector report released by the Bank of Ghana shows that the private sector made up as much as 90 percent of all NPLs for the banking sector as at April this year.
The Bank of Ghana says between April 2017 and the same period this year, the non performing loans increased from 7.15 billion cedis to 8.63 billion cedis.
As a result, the current NPLs show an increase in the ratio; from 19.8 to 23.5 percent within the one year period.
Even though there was a drop in the private sector’s share of the loans gone bad between 2017 and 2018, the sector defaulted most with its share amounting to 7.827 billion cedis while the public sector accounted for 802.5 million cedis.
A critical look at the various sectors and their contribution to the NPLs also shows that the commerce and finance sectors such as trading in goods, accounted for the highest of 29.2%.
It was followed by the services sector and the mining and quarrying sector with 13.4 and 3.5 percent.
Meanwhile the paid up capital for the banking sector increased from 4.145 billion cedis in April 2017 to 5.22bn in April 2018.
This the central bank attributed to the injection of capital to meet the new minimum capital requirement as well as fresh capital injection by the three newly licensed banks i.e. Ghana Home Loans bank, the Beige bank and Construction bank.
Also, total assets rose from 84.48 to 97.78 billion cedis between April 2017 and the same period this year.
It is however worth to note that deposits still dominate as the main source of income for banks; it increased from 52.83 billion to 61.07 billion cedis within the one year.
Source: citibusinessnews.com
