Blame yourselves for huge losses in government securities – UGBS Senior Lecturer

Banks must blame themselves for the huge losses recorded in their books because of heavy concentration of their portfolios in Government of Ghana securities.

According to a Senior Finance Lecturer at the University of Ghana Business School, Dr. Benjamin Amoah, the banks must pay the price for failing to undertake financial intermediation.

Majority of the banks in Ghana recorded losses last year, according to their 2022 Audited Financial Statement. This is as a result of the impact of the Domestic Debt Exchange Programme on their operations.

Speaking to Joy Business, Dr. Amoah said banks must admit they have not done much with respect to financial intermediation.

“It is a basically a reflection of the portfolios that the bank has created over time in their attempt to generate interest for their shareholders.”

“Clearly, these banks have heavily been impacted because they exposed themselves to the Government of Ghana bonds which we know now has been re-weighted by Bank of Ghana to be 100%, meaning that the cash flows from these bonds are impaired. Hence, these banks have to write-them-off through their income statements and that is what is translating into the losses that these banks are recording and posting to the public now”, Dr. Amoah furthered.

He added that it was appalling banks were generating more income from government securities.

“So, indeed, it is appalling if you want to look at it from the fact that the banks were mostly generating income from investment income through the Government of Ghana bonds instead of doing more of lending to the private sector”.

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