An analysis of the Summary of Macroeconomic and Financial Data from the Bank of Ghana released in November shows that the percentage of Non-performing Loans in the banking sector only increased marginally from 13.6% in January 2020 to 15.3% by October 2020, despite fears that the impact of the pandemic could lead to many businesses defaulting on loan repayment thereby worsening the NPL situation.
Speaking at the 2020 Annual Dinner of the Chartered Institute of Bankers, Dr. Ernest Addison said to prevent any weakening of the financial sector in the aftermath of the pandemic, as well as to maintain confidence and safeguard financial stability, the Bank of Ghana will continue to strengthen all the regulatory measures implemented over the last three and half years.
Governor of the Bank of Ghana Dr. Ernest Addison says he is mindful of the fact that in the aftermath of the Coronavirus pandemic, non-performing loans in the country may rise beyond the current stable levels.
“The economic impact of the pandemic may result in higher non-performing loans and some capital erosion of banks. Looking ahead, the Bank of Ghana will continue to strengthen all the regulatory measures implemented over the last three and half years to maintain confidence and safeguard financial stability.”
“In the aftermath of the pandemic, (2021, 2022 or 2023) we would have to follow a careful unwinding of countercyclical measures that we have implemented and allow the financial system to function without the regulatory forbearance that we have put into place. Banks will have to be vigilant and upgrade their capabilities, improve governance and risk culture, and we are optimistic that with this approach, we will build a robust, resilient and capable financial sector to support Ghana’s Beyond Aid Agenda,” the Governor added.