An Annual Performance Review – A REPORT BY LIMA PARTNERS
The banking industry in Ghana has been experiencing significant changes over the last three years. This has been driven by a requirement for banks to meet increased capital requirements, resulting in license revocations and consolidation of some banks. In addition, the Covid-19 pandemic has also had an impact on the industry. Despite these challenges, the industry has been able to improve corporate governance, increase capitalisation and achieve greater regulatory compliance. This has resulted in a better capitalised and more liquid industry, with stronger financial performance. The banking sector in Ghana has faced a
number of challenges in recent years. One of the most significant of these has been the increased capital requirements imposed by the Bank of Ghana. This has led to the revocation of licenses for a number of banks, as well as the consolidation of others. While this has been a difficult process for the industry, it has also led to improvements in corporate governance, greater regulatory compliance and stronger capitalisation. These changes have helped to create a more stable and secure banking sector in Ghana. The Covid-19 pandemic has also had an impact on the banking industry in Ghana. The pandemic has led to a slowdown in economic activity, which has affected the profitability of banks. However, banks in Ghana have responded well to the challenges posed by the pandemic. They have implemented a range of measures to mitigate the impact of the pandemic, such as providing loan repayment holidays and restructuring loans.
Despite the positive changes seen in the banking industry in Ghana, there are concerns that recent financial and economic crises, as well as the effects of a debt restructuring exercise by the government, may have a negative impact on the industry. The country has recently experienced a number of economic and financial challenges, including high inflation, a currency depreciation, and a high debt-to-GDP ratio. These challenges are expected to erase the gains made by the industry post the capital requirement and
Covid.
In conclusion, the banking industry in Ghana has undergone significant changes over the last three years, driven by increased capital requirements and the Covid-19 pandemic. These changes have resulted in a more stable and secure industry, with better corporate governance, greater regulatory compliance, and stronger capitalisation. However, recent economic and financial crises, as well as a debt restructuring exercise by the government, are expected to have a negative impact on the industry.
This report examines how banks have responded to these challenges and particularly how it has affected financial performance over the period.