Banks wrote off ¢3.19bn as bad debt in October 2023

Banks wrote off ¢3.19 billion as bad debt in October 2023, a 9.5% growth year-on-year, the Domestic Banks Income Statement published by the Bank of Ghana revealed

This is compared to the ¢2.92 billion registered during the same period in 2022.

The provision were in the form of loan losses, depreciation, among others.

According to the Bank of Ghana, asset quality risks elevated in October 2023, reflecting the pickup in the Non-Performing Loans stock and NPL ratio during the period.

The industry’s NPL ratio increased to 18.3% in October 2023, from 14.0% in October 2022. This is on account of a higher growth in the NPL stock and a contraction in gross loans during the review period. Similarly, the NPL ratio adjusted for the fully provisioned loan loss category increased from 3.9% to 6.4% during the same comparative period.

The NPL stock increased by 18.8% to ¢13.5 billion in October 2023 from ¢11.3 billion in October 2022, reflecting a deterioration in domestic currency loans.

The private sector accounted for the largest share of nonperforming loans of 93.8% in October 2023.

The increase in the industry NPL ratio reflected deterioration in NPL ratios for five economic sectors while three reported improvements during the review period.

Agric, forestry, fishing sector record highest NPL of 37.4%

The agriculture, forestry and fishing sector recorded the highest NPL ratio of 37.4%, a sharp increase from 22.4% a year ago, followed by the construction sector with an NPL ratio of 36.9%, from 31.7% a year earlier.

The NPL ratio of the transportation, storage and communication sector recorded the highest year-on-year increase to 27.3% from 11.2%, while the commerce and finance sector NPL ratio increased to 19.6% from 15.9% over the same comparative period.

The NPL ratios of the electricity, water and gas, manufacturing and mining and quarrying sectors, however, declined to 8.3%, 13.8% and 4.1% in October 2023 from their respective positions of 11.1%, 14.6% and 4.6% in October 2022.

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