Even though financial institutions since the outbreak of the coronavirus pandemic have been very careful in giving out loans to business and individual clients, the First National Bank (FNB) recognizing the need to help existing clients and new ones supported give out funding to allow businesses to survive within the period.
The bank’s move norvanreports.com understands is because of their concern about the potential setback to the economy due to the outbreak of the coronavirus pandemic and measures put in place by their regulator, the Bank of Ghana to enhance banks’ ability to respond to the needs of their clients and to support the economy in general. These measures involved cuts to the Monetary Policy Rate (by 150 basis points) from 16% to 14.5% and the Primary Reserve Requirement (by 200 basis points) from 10% to 8%.
This FNB took a cue and immediately, interest rates for lending fell by various degrees.
In 2020 alone, gross loans made by the First National Bank (FNB) according to the bank’s 2020 Financial Statement, amounted to Ghs 773 million, increasing its loans to businesses amid the Covid-19 pandemic by Ghs 663 million from some Ghs 110 million made in 2019.
In terms of total assets value, FNB’s assets value increased by more than Ghs 1.3 billion ending 2020 at Ghs 2.3 billion from a previous figure of Ghs 986 million.
The surge in the bank’s assets value was on account of increments in the cash and cash equivalents, loans and advances, and investment securities.
However, FNB recording a remarkable increase in interest income of Ghs 195 million for last year as against some Ghs 96 million recorded for 2019, saw items such as interest expense, personnel expenses, debt and amortisation, and other operating expenses cut down the significant increment in the bank’s interest income.
In total, interest expense alone chipped away Ghs 100 million of the gross interest income made by the bank for the year under review.
FNB according to its 2020 Financial Statement, ended 2020 with a total profit of Ghs 731,000, a decline by more than 368 percentage points when compared to that of 2019 when the bank posted some Ghs 2.6 million as profit.
Recorded total liabilities for last year, also witnessed a corresponding increase of close to Ghs 1.3 billion. FNB ended 2020 with a total liability figure of Ghs 1.8 billion, up from the Ghs 553 million recorded for 2019.
Also, the bank’s Non-Performing Loans (NPLs) increased from Ghs 656,000 to Ghs 26.9 million from end-December 2019 to end-December 2020. Representing an increase from 0.59 to 3.5 in percentage terms.
