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Governor of the Central Bank, Dr. Ernest Addison have announced that commercial banks in the country have been given September of this year to show proof of their re-capitalization plan.
Banks are expected to raise some GH¢400 million to remain in business despite the negative effect of the Domestic Debt Exchange Programme on their operations.
Answering questions during the 112th Monetary Policy Committee (MPC) press conference in Accra, Dr. Addison says the Bank of Ghana will follow up on the directive.
“Most banks are working towards that, and they have been given a period I think up to September 2023 to submit to us [BoG] as to what their recapitalizations are, and we will be following up on that. To ensure that instead of banks distributing profits that they have started making, use those resources to rebuild their capital buffers,” Governor of the Central Bank, Dr. Ernest Addison noted.
Banks in Ghana recorded after-taxes losses amounting to GH¢6.6 billion in 2022, according to Dr. Ernest Addison.
This was largely due to the negative impact of the Domestic Debt Exchange Programme (DDEP). 23 banks operating in the country participated in the exercise.
Dr. Addison said, “The 2022 audited financial statements of banks reflected the full impact of the DDEP and the challenging operating environment that prevailed in the year,” said during the 112th Monetary Policy Committee (MPC) presser.
Most banks reported significant losses on the back of the mark-to-market valuation losses on their respective holdings in Government of Ghana bonds following the implementation of the DDEP.
Other losses were due to higher impairments on loans and rising operating costs.
The industry posted before-tax losses of GH¢8.0 billion in 2022 compared with a profit of GH¢7.4 billion recorded in 2021.
Source: myghanadaily
