COVID-19 Slows Down Banking Sector Business

Mr John Awuah, the Deputy Chief Executive Officer of Ghana Association of Bankers, has revealed that the advent of the COVID-19 pandemic has slowed down banking business and increased risk of impact on loan performance.

COVID-19 has had a negative impact on the economy and the banking sector as economic activities had taken a downturn with growth projected to be 1.5 per cent compared to an earlier outlook of 6.5 per cent for 2020, he said.

Mr Awuah explained that some sectors of the economy have had zero cash inflows during the pendency of the pandemic especially Aviation, hotels and resorts, bars and restaurants.

Mr Awuah said this at the Second Edition of Webinars organised by Integrity Magazine, a subsidiary of Krif Ghana Limited, on the theme: “Effects of COVID -19 On Corporate Ghana- The Banking Sector- Part 1”

He said economic projection of the COVID-19 was that: “It will take much longer for businesses and households to return to normal operations with its consequential impact on the ability to perform on existing obligations resulting in a heightened probability of increased non- performing loans”.

Mr Awuah outlined some post-COVID-19 activities by the banks amongst which were credit expansion to productive sectors such as the manufacturing and small and medium enterprise financing.

Other measures were for banks to invest heavily to enhance Fintech capabilities, whilst Government introduced policy initiatives to redirect the trajectory of credit expansion and the Banking Regulator to proactively balance the need for regulatory prudence and inertia post-COVID-19.

He said banks had a duty to anchor the economy by cautiously continuing with credit expansion to productive sectors among others.

He also mentioned that banks have cut interest rates by between 1.5 per cent and 3.5 per cent. In addition, a total of 1.6 billion Ghana cedis of Payment Holidays had been granted to selected customers with specific needs during this COVID-19 period.

Source: GNA