Cleanup bolsters Ghana banks
Lenders are expected to see higher returns as a regulatory spring clean cuts the number of banks
Accra — A regulatory spring clean that has cut the number of Ghanaian banks by almost a third is strengthening the industry, brightening prospects for lending growth and easing the pain of unpaid debts. The expanding economy is also helping lenders put behind them years of challenges weighing on the West African nation — including daily power outages, poor banking regulation and an inflation rate that has averaged 14% since 2013. Flush with cash after a recapitalisation exercise by the central bank, lenders are poised to see a drop in nonperforming loans and higher returns, according to Moody’s Investors Service and Databank Group. “The economy over the last two years has been on a path of steady improvement,” said Kwesi Boti, an economist at Accra-based Databank. “With the robust growth outlook, banks should find a lot of bankable propositions and not get trapped in loan defaults the way we’ve seen.” The central bank in 2017 tripled capital requirements to bolster weak buffers and ...
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