Republic Bank committed to supporting businesses amid the pandemic
Managing Director of Republic Bank Ghana, Farid Antar, has said Republic Bank remains committed to supporting businesses navigate the adverse impacts of the Covid-19 pandemic.
This, he noted, is by continuing the provision of credit to businesses.
“The country and economy is not out of the woods yet, there are still headwinds ahead, but we have significantly supported our customers over the period. We were the first to roll out the loan deferment programme for customers.
“Amid the pandemic, we have done a lot of programmes for our clients, for instance, we introduced the Tactical Assistance Programme to assist companies, we restructured our loans among others and so yes it has been a challenging period but we are still committed to helping our customers because we will not survive if our customers don’t survive,” Mr Antar stated.
Republic Bank, per its third-quarter 2021 financial statement increased credit to the private sector providing some Ghs 1.62 billion in loans and advances to its customers.
The Bank also strengthened its loan asset quality, reducing Non-Performing Loans (NPLs) from 19.27 percent in Q3 2020 to 17.56 percent in Q3 2021.
Private sector credit growth according to the Bank of Ghana (BoG) is yet to fully recover to pre-pandemic levels.
Governor of the Central Bank, Dr Ernest Addison notes that the slow recovery of private sector credit growth from the pandemic is due to lingering supply-side risk aversion from the shock of the pandemic as well as slower-than-expected growth in demand for loans by businesses.
Annual nominal growth in private sector credit, the BoG asserts, slowed to 9.5 percent in August 2021 compared with 14.3 percent, in the corresponding period of 2020. Similarly, real private sector credit contracted marginally by 0.1 percent compared to a growth of 3.4 percent, recorded over the same comparative period.
Also contributing to the private sector’s credit slow recovery from the pandemic is the crowding out of the private sector by government as government tends to borrow more from commercial banks and the banks in turn prefer to lend to government given that loans made to the state are risk-free.
According to the Governor, investments in government’s securities by banks increased to Ghs 80.3 billion by the end of August this year.
