BoG targets lower NPLs as recapitalization exercise ends

Adnan Adams Mohammed
The Non performing Loans of universal Bank in the
country are expected to drop considerably after the recapitalization exercise
which has reduced the commercial banks to 23 banks out of 33 banks.
Looking ahead, there will be a need to focus on
reducing the high NPLs in the sector and addressing the risks associated with
the high degree of interconnectedness in the financial system which will
require close monitoring to ensure financial stability,” the governor of Bank
of Ghana, Dr Ernest Addison has said.
The 23 banks are sound, liquid and
well-capitalized, and well-positioned to translate the gains made so far from
two years of far-reaching reforms to the rest of the economy.
The exercise, according to BoG, has protected
deposits of over 1.5 million depositors with deposits of GH¢11.6 billion. This
includes deposits of savings and loans companies, rural and community banks,
investment fund managers, pension funds, and life insurance companies with the
banks.
“The increase in the stated capital which formed
part of the banking sector cleanup is an indication of challenging times for
banks. The Managing Director of Societe Generale (SG) Ghana, Hakim Ouzzani has cautioned
his colleagues in the banking sector not to go to sleep after successfully
meeting the Bank of Ghana’s minimum capital requirement.
At the end of December 2018, total assets of the
banking sector grew by 14.7 percent year-on-year to GH¢107.3 billion.
“Growth in industry assets is expected to rebound
as banks deploy their newly-injected capital towards financial intermediation,”
BoG said in a statement.
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