The 2023 Ghana Banking Survey by auditing firm, PwC, has revealed that 92% of banks without government control or ownership conceded that losses from the Domestic Debt Exchange Programme (DDEP) were their biggest pain.

In comparison, 75% of the government-owned or government-controlled banks share this view.

According to the survey, the banks were unprepared or ill-prepared for the DDEP. They seem to have missed critical signs that should have given them a hint that their investments in government securities were at risk.

100% of local banks, 83% of regional banks and 67% of international banks that participated in the online survey flagged profitability as their major concern post the implementation of the DDEP.

For liquidity concerns, regional banks (100%) were the most concerned, followed by local banks (87%).

With regard to Capital Adequacy and Solvency concerns, local banks (100%) were the most anxious, followed by regional and first quartile banks (83% each).

On concerns about investor perceptions, international banks (67%) and second quartile banks (60%) seemed to be the two main categories/ sub-categories that exhibited concern for what investors might perceive as the worth of their businesses.

In addition, bank executives also indicated that they have observed some changes in customer behaviours that are attributable to the DDEP and which could—if not managed successfully—negatively impact on the industry’s prospects. That said, some of these changes also present banks with opportunities.

The most conspicuous was a depressed demand for securities issued by the government.

69% of bank executives responding to the survey noted that they had noticed this. This was reported mainly by regional banks (100% of participating banks), first quartile banks (83%) and second quartile banks (80%).

Furthermore, the banks acknowledged that the road back to profitability won’t be smooth sailing.

The bank executives were therefore unanimous in their expectation of a challenging macroeconomic outlook over the near-to-medium term, but remain confident for quick comeback.