The International Monetary Fund has indicated that the continued progress in addressing Ghana's financial sector challenges is essential to ringfence financial sector stability.
In its second review of the Extended Credit Facility programme, the IMF said the Bank of Ghana has appropriately escalated punitive remedial and/or corrective measures to ensure that banks implement their recapitalization plans, and as such the Ministry of Finance has started to recapitalize state-owned banks.
“Continued progress on these fronts is of the essence”, it added.
Given the rise of Non-Performing Loans observed over the last year, the IMF advised that it is critical to ensure adequate reporting and provisioning of NPLs through enhanced supervision.
“Addressing problems at Specialised Deposit Taking institutions and Non-Banking Financial Institutions is important but should be done in a cost-effective way. Looking ahead, the authorities should ensure the timely and full implementation of the recently approved strategy to resolve NIB’s financial and operational problems and use some of the lessons from NIB to address effectively long-term structural weaknesses in other state-owned banks, including through better enforcement of regulations and governance”, it added.
Banking industry NPLs surged to 24.1%
The banking industry’s Non-Performing Loans (NPLs) ratio surged to 24.1% in June 2024, up from 18.7 percent in June 2023.
According to the Bank of Ghana, despite improvements in the banking sector’s performance, elevated credit risk poses a threat to the sector’s recovery process.
However, it believes, the consistent rebound in profits, adherence to recapitalisation plans, and enforcement of strict credit underwriting standards will however help ensure that banks remain on the path to full recovery and resilience.
Latest Stories
-
Ghana lost 160K tons of cocoa to smuggling in 2023/24 season, Cocobod official says
16 mins -
Man who threatened to shoot and injure public officials remanded
2 hours -
Sierra Leone building collapse kills 8
2 hours -
TikTok says US ban would have ‘staggering’ impact on free speech
2 hours -
Dozens of Muslim worshippers killed in Nigeria crash
3 hours -
Antony must earn right to play for Man Utd – Ten Hag
3 hours -
Osaka splits from coach Fissette
3 hours -
Nobody asks players about adding games – Alisson
3 hours -
Boeing warns of job losses and cuts spending after strike
4 hours -
Man City’s hearing for 115 charges begins
4 hours -
NDC protest will be peaceful – Tanko- Computer
4 hours -
Amazon ends working from home for office staff
4 hours -
Rupert Murdoch’s ‘Succession’ court battle begins
4 hours -
John Mahama commends Evangelist Seth Quaye for donating 150 acres of land worth $2m to Assemblies of God Church’s centenary project
4 hours -
It’s difficult to get housemaids in Accra because of Free SHS – Bawumia
5 hours