• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

Ghana’s debt restructuring will impact Nigerian banks – Fitch Ratings

3 years ago
in Business, Features, highlights, Home, home-news, latest News, Markets
2 min read
0 0
0
165
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Ghana’s debt restructuring will impact Nigerian banks – Fitch Ratings

A global credit rating agency, Fitch Ratings, said on Thursday that a restructuring of Ghana’s debt would have some impact on some Nigerian banks operating in the neighbouring country.

Ghana is pushing ahead with its plan to restructure its debt in a bid to qualify for a $3 billion loan from the International Monetary Fund. On Monday, the country started offering domestic bondholders fresh local-currency bonds that won’t pay interest before 2024 in exchange for their existing debt, according to Bloomberg.

“Sovereign debt distress is the major risk to African banks’ financial profile,” Fitch said in its African Banks Outlook 2023 report. “The Ghana debt restructuring will affect domestic as well as regional banks.”

It said the debt restructuring would have large implications for the banking system as banks have large exposure to the sovereign through holdings of government securities.

Describing the outlook for Nigerian banks as deteriorating, Fitch said asset quality would remain fundamentally conditioned by sovereign credit risk, given high sovereign exposure through securities and cash reserves at the Central Bank of Nigeria (CBN).

“Asset quality of the largest five banking groups will also be influenced by rising sovereign debt sustainability risks across the continent through their Sub-Sahara Africa subsidiaries. A restructuring of Ghana’s debt would have some impact [on] some banks’ asset quality as they have large operations in the country,” it said.

RelatedPosts

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

Nigerian banks operating in Ghana are Access Bank, Ecobank, Fidelity Bank, Guaranty Trust Bank, United Bank of Africa and Zenith Bank.

Over 50 percent of banking system assets in Ghana are controlled by subsidiaries of South African, Nigerian and Togolese banking groups, according to Fitch.

“These subsidiaries tend to represent a fairly small percentage of their respective banking group’s assets, thereby making extraordinary capital support manageable. We believe parent banking groups will likely provide capital support to preserve their operations in Ghana through a sovereign default,” it said.

Fitch said the losses imposed on the banking system from the announced debt restructuring could be of such a magnitude that it undermines some banks’ solvency and liquidity.

“Fitch believes that the authorities will introduce regulatory capital forbearance to help the banking system through a restructuring, while providing liquidity and other support to prevent a widespread financial system crisis,” it said.

According to the report, Nigeria’s real GDP growth is expected to remain robust in 2023 but operating conditions will weaken due to higher inflation, rising interest rates and hard currency shortages.

The rating agency said earnings would receive a boost from higher interest rates but a material naira devaluation would have a negative effect on capitalisation, and continued hard currency shortages would lead to tighter US dollar liquidity in 2023.

It said banks would continue to experience difficulties sourcing US dollars from the CBN on behalf of customers in respect of trade finance obligations.

“Banks will leverage relationships with correspondent banks and use their own US dollar resources to manage hard currency shortages, causing foreign-currency (FC) liquidity coverage of liabilities to decline in 2023. However, FC liquidity buffers will remain satisfactory, particularly given the absence of Eurobond maturities in 2023,” the agency said.

Fitch expects a moderate increase in impaired loans as borrowers contend with operating environment risks.

Banks have experienced strong loan growth in recent years as a result of onlending to small companies in manufacturing and agriculture sectors, it said.

Fitch expects such exposures to be a source of new non-performing loans.

It said continued high oil prices would provide some support to loan quality despite chronic production issues.

“Profitability will improve in the near-term as a result of stronger revenues. Increased fixed income yields will widen net interest margins (NIMs), while a potential material naira devaluation would result in sizeable revaluation gains due to long FC positions,” it said.

Nigeria’s punitive cash reserve requirement will remain a key constraint on NIMs and profitability, according to Fitch.

Tags: Fitch RatingsGhana’s debt restructuring will impact Nigerian banks – Fitch RatingsGhanaian banksNigerian Banks
No Result
View All Result

Highlights

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

Banking Sector Soundness Remains Robust in 2024 Amid Strong Profitability, Adequate Capital Buffers

Sha’Carri Richardson Withdraws from US Trials Following Arrest

From Singuluma to El Kaabi: Can CHAN 2024 Unleash the Next Hat-trick Hero?

Ghana to Welcome King’s Baton Relay on August 8 Ahead of 2026 Commonwealth Games

Trending

Features

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

August 2, 2025

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes Parliament has adjourned...

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

August 2, 2025

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

August 2, 2025

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

August 2, 2025
Bank of Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

August 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.