Banks wrote-off ¢1.01 billion for the first half of this year, about 25% more than the same period last year. 

According to the Domestic Money Banks Income Statement Highlights, the bad debt was classified as loan losses, depreciation, amongst others.

However, the general size of loans and advances went up.

The industry’s stock of gross loans and advances (excluding the loans under receivership) increased to ¢45 billion at the end of June 2020.

This represents a 16.2% annual growth, after remaining somewhat flat between June 2018 and June 2019.

The year-to-date growth in gross loans and advances however recorded a moderate contraction of 0.4% in half-year-2020 compared with the 5.9% growth recorded during the same period in 2019.

This  partly due to repayment of considerably high short-term public sector loans and a weak demand for credit from the pandemic-induced slowdown in economic activity during the first quarter of 2020.

Asset quality

The asset quality of the banks according to the report improved year-on-year with the Non-Performing Loans ratio declining from 18.1% in June 2019 to 15.7% in June 2020.

This is on account of the marginal increase in the stock of NPLs by 0.7 per cent against the 16% growth in credits over the period.

However, the 15.7% NPL ratio as at end of Quarter Two 2020 represents an uptick of 1.2 percentage points above the end-Quarter One 2020 position.

This reflects a higher increase in the stock of NPLs during Q2-2020 due to loan repayment challenges by clients who have been severely impacted by the pandemic.

The gradual inch-up in the NPL ratio which began in Q1-2020 largely reflected the slowdown in gross advances growth and increasing NPLs during HY-2020.

Wages and Salaries

The 23 banks also spent almost ¢1.82 billion on wages and salaries for the first six months of this year. This represents an increase of 9.3% over the same period last year.

In June 2019, staff cost was estimated at GHS1.6 billion, 30% more than the previous year.