Access Bank Ghana has made a commitment to strongly grow its loan book this year despite a higher than average Non-Performing Loan ratio when compared to other banks in the country.
Whereas gross earnings of the Bank were up by 12 percent in 2018, its loans and advances however declined by 6 percent in 2018. Its Impairment charges went up by 123 percent in 2018 from GHC 42 million in 2017 to GHC 92 million in 2018.
Speaking on the banks loan growth strategy, when Access Bank took its turn on the “Facts Behind the Figures” Program organized by the Ghana Stock Exchange, the Managing Director of the Bank Olumide Olatunji, said they would take a balanced approach to the extension of credit in an attempt to support governments financial inclusion agenda.
“We want to identify sectors in the retail space and the wholesale space in terms of loan growth. To demonstrate the fact that we support the financial inclusion goal of this administration we’ll do a lot of things to grow the retail banking book of the bank. In the wholesale space we want to put systems in place and make the connections needed to support trade in Africa.”
Banking sector growth
The year 2018 ended on a solid note with a more consolidated banking sector as weaker and undercapitalized banks that posed risks to financial stability were resolved. This has enhanced efficiency and restored confidence and resilience in the banking sector, with banks now better positioned to support private sector-led growth in the Ghanaian economy.
According to the latest data from the Bank of Ghana, banking sector assets in December 2018 grew by 14.7 percent to GH¢107.34 billion, up from 13.3 percent a year ago. The growth in assets was funded mainly by deposits and increases in paid-up capital from the recapitalization exercise. Total loans and advances (including loans of the 5 defunct banks transferred to the Receiver) were up by 12.9 percent to GH¢42.7 billion as at end of December 2018. Domestic gross loans (excluding the loans of the 5 defunct banks) however contracted by 3.5 percent to GH¢36.50 billion in the review period.
Real credit growth (excluding loans under receivership) was subdued in December 2018 compared with the previous year. The banking industry’s stock of gross loans and advances (both domestic and foreign) contracted by 12.0 percent in real terms to GH¢36.54 billion in December 20183 compared with the 4.2 percent contraction recorded in the same period last year.
Loans to the private sector (private enterprises and households) far outweighed loans to the public sector, accounting for 91.4 percent of the total stock of loans as at end-December 2018, with the remaining 8.6 percent going to the public sector.
The three largest recipients of total credit, namely, commerce & finance, services and manufacturing sectors accounted for 56.9 percent of total credit in December 2018. Sectors with the lowest share of outstanding credit balances were the mining and quarrying, and the agriculture, forestry and fishing sectors with shares of 3.2 percent and 4.7 percent respectively.
By: Bobbie Osei/citibusinessnews.com/Ghana