The bank’s recent annual report shows that it recorded an impairment position of ¢404 million in 2016 but that jumped by 208.49 percent to ¢1.3 billion in 2017.
The Central Bank of Ghana has recorded a loss of ¢1.64 billion in 2017 having registered a profit before tax of ¢709.5 million.
The bank’s recent annual report shows that it recorded an impairment position of ¢404 million in 2016 but that jumped by 208.49 percent to ¢1.3 billion in 2017.
This impairment performance points to the BoG’s liquidity support to collapsing financial institutions in the country.
According to the report, despite seeing its total assets increase from ¢49.74 billion in 2016 to ¢55.2 billion in 2017, its loans and advances dropped by 14 percent from ¢7.6 billion in 2016 to ¢6.5 billion due to a reduction in its exposure to the banking industry.
The Governor of the central bank, Dr. Ernest Addison, commenting on the state of financial sector, said, “As you would realise by now, poor banking practices, coupled with weak supervision and regulation by the Bank of Ghana have significantly undermined the stability of the banking and other non-bank financial institutions.
“We all know some of the consequences by now—revocation of licenses of two banks while other banks were placed under comprehensive capital restoration plans.
The Bank of Ghana, in its 2017 Annual Report, noted that despite the Purchase and Assumption (P&A) arrangement for two banks, the banking sector remained generally stable, solvent and liquid.
However, the year, according to the BoG, witnessed a deterioration of 4.3 percentage points in the Non-Performing Loans (NPL) ratio from the previous year’s ratio of 17.3 percent.
“Following an Asset Quality Review (AQR) exercise conducted on the banks, a significant portion of the NPLs was fully provided for. If the fully loan loss category is written off, the NPL ratio reduces to 8.8percent,” the report said.