Banks record considerable growth in profits after losses in 2022 – BoG

Banks’ half-year performance in 2023 shows considerable growth in profits, following significant losses posted in 2022 on account of the Domestic Debt Exchange Programme (DDEP), Governor of the Bank of Ghana Dr Ernest Addion has said.

Dr Addison stated that If this trend continues, the country will expect banks to rebuild capital buffers quickly in addition to equity capital injections by shareholders to give a further boost to real sector growth and to build resilience of the banking sector.

Speaking at the 113th Moneyray Policy Committee (MPC) press conference in Accra on Monday July 24,  he said “Early operationalisation of the Ghana Financial Stability Fund should also help provide additional recapitalisation support for eligible banks in line with the criteria and governance framework agreed with the IMF and the World Bank.”

The restructuring of the local currency and overseas debt last year resulted in the first loss on record for two of the West African nation’s top banks.

GCB Bank Plc, the country’s largest lender by assets, posted a 593.4 million cedis ($50.5 million) net loss for the year to end-December, its first since 1993 when Bloomberg started maintaining data.

Standard Chartered Bank Ghana Ltd., the biggest by market value, reported a loss of 297.8 million cedis.

Banks operating in West Africa’s second-largest economy have taken a hit of about $1.4 billion, according to Bloomberg, as Ghana restructures most of its public debt, estimated at 576 billion cedis.

The impairments prompted Guaranty Trust Holding Co., Nigeria’s largest bank by market value, to vow to slow lending and bond trading in Ghana.

GCB Bank took a charge of 1.83 billion cedis after impairing its debt securities, while for Standard Chartered Bank Ghana the amount was 173 million cedis.

Ghana’s lenders were allowed a month’s extension to release full-year earnings.

Source: 3news