The loss position of banks in Ghana may continue into next year, a Senior Finance Lecturer at the University of Ghana Business School, Dr. Benjamine Amoah, has stated.
According to him, the impact of the Domestic Debt Exchange on the broader economy has impacted negatively on the banks’ balance sheets.
Banks in Ghana are said to have lost about ¢15 billion as a result of the impact of the DDEP on their operations.
This has triggered the increase in the minimum capital requirement of the financial intermediaries. Indeed, banks, according to the Bank of Ghana have a maximum of four years, ending 2025, to restore the minimum paid-up capital.
Speaking to Joy Business, Dr. Amoah said even without the Domestic Debt Exchange Programme, banks will have still shore up their capital because of exchange rate losses.
“It is simply the reflection of what has happened in the economy over the past year or so and the fact that these banks also operate within the economy”.
“So whatever happens in the bigger economy would definitely reflect on the performance of the banks and to a large extent on the balance sheets of these banks”, he stressed.
According to him, it is not surprising banks are reporting losses for 2022.
“It is not surprising that the banks are reporting some of these non-performance for this particularly year and maybe hopefully next year because we are still not at the end of these challenges”.
According to the Bank of Ghana, derecognition losses emanating from the Domestic Debt Exchange Programme will be spread equally over a period of four years, effective 2022, for the purposes of Capital Adequacy Ratio (CAR) computation.
The International Financial Reporting Standards (IFRS) states that derecognition refers to the removal of an asset or liability (or a portion thereof) from an entity’s balance sheet.
Latest Stories
-
Myjoyonline Interview with Abubakar: Guinness World Record Holder for ‘Most Trees Hugged In An Hour’
43 seconds -
JoyNews’ Clinton Yeboah honoured at 2023 Int’l Sports Media Awards in Spain
39 mins -
14 PWDs selected for maiden Africa Health Collaborative Medicine Counter Assistant training
1 hour -
Manchester United open to offers for nearly all of squad
1 hour -
Price of LPG per kilogramme constitutes 22% of taxes – LPG Marketers Association
3 hours -
Nigeria appoint Finidi George as new Super Eagles boss
4 hours -
Elevating Ghana’s creative industry: A blueprint for competing with Nigeria and South Africa
5 hours -
Poor finishing a problem for Asante Kotoko throughout the season – Prosper Ogum
5 hours -
Samini teams up with Francis Osei for ‘Sticks N Locks’ EP
5 hours -
Government should resource record labels – Seven Xavier
6 hours -
I need majority in parliament to successfully complete my term – Akufo-Addo pleads
6 hours -
Next NDC government will not recognise illegal contracts signed by current administration – Sammy Gyamfi
6 hours -
Premier League clubs vote in favour of spending cap plans
6 hours -
Nigeria’s fuel crisis brings businesses to a halt
6 hours -
King Promise impresses fans at sold out show in Singapore
6 hours