Ghanaian Banks Are Well Positioned To Endure Credit Shocks

The Bank of Ghana is profoundly positive that banks will have the option to withstand the credit stuns that is brought about by the COVID-19 pandemic.

According to the Governor of the Bank, Dr. Ernest Addison, the most recent pressure tests by the national bank, which were directed in April 2020, recommended that banks were strong and all around sufficiently positioned to withstand liquidity and credit stuns. The capital ampleness proportion is well over the reconsidered administrative floor of 11.5 percent.

The bank’s non-performing loan ratio had crept up during the quarter, mirroring the developing effect of the pandemic on low credit growth and higher loan provisioning.

Up to this point, banks are additionally reacting decidedly to the recent reported strategy activities to help the economy by diminishing loaning rates and supporting credit growth. They are additionally as offering bans on loan repayments to cushion customers.

The Governor was addressing the media as a result of a forecast PwC did about the effect of the pandemic on banks. The report by PwC stated, the pandemic would affect adversely on generally asset quality, capital and liquidity in the sector.

With the monetary log jam, PwC said there was uplifted danger of banks decreasing their rates and exchanging pay which would squeeze their net premium pay.

While the uncertainties emerging from COVID-19 are considerable and conditions make certain to change, the firm said it anticipated that should block banks from evaluating their normal credit misfortunes.

According to the report, despite the fact that the expected credit misfortunes is testing, that doesn’t mean it is difficult to appraise an effect dependent on the sensible and acceptable data that is accessible.

On layaway chance, the report additionally expressed that, by and large and specifically in quarter one of 2020, it is far-fetched that banks will have adequate opportune information to refresh credit level probabilities of default which are frequently a center component of surveying SICR.