Non-Performing Loans (NPLs) at end-February 2021, amounted to Ghs 7.3 billion.
This is according to the March 2021 Banking Sector Development Report by the Bank of Ghana (BoG).
Despite asset quality deterioration waning in the second half of 2020 on the back of reliefs provided by banks in the form of loan restructuring and loan repayment moratoria, the BoG notes that, a marginal deterioration was however recorded in the first two months of this year with NPLs reaching 15.3 percent at end-February 2021.
The end-February 2021 NPL ratio of 15.3 percent, the Central Bank further notes, was marginally higher than the year-end NPL ratio of 14.8 percent and the previous years’ NPL ratio of 13.8 percent.
Similarly the adjusted NPL ratio, which excludes the fully provisioned loss category loans, increased from 5.2 percent and 6.5 percent in February and December 2020
respectively, to 6.6 percent at end-February 2021.
“The increase in the NPL ratio over the one year period reflects an actual increase in the stock of NPLs (deterioration in loan quality) by 15.1 percent to GH¢7.3 billion at end-February 2021, as well as the lower credit growth recorded this year relative to last year,” stated the report.
Meanwhile, banks growth in profit-after-tax slowed to 5.9 percent in the first two months of this year from the 38.8 percent recorded during the same period in 2020.
The decline in profit-after-tax growth according to the report, was as a result of a large decline in the growth of banks’ interest income.
Interest income growth, the report notes, declined to 9.5 percent in February 2021 from 22.0 percent in February 2020 due to relatively low growth in credits.
