COVID-19: More Banks to collapse soon in Ghana – PWC Ghana shares concerns

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In spite of the 2018/2019 financial sector clean ups by Bank of Ghana, BoG, leading to the liquidation of many banks, the collapse of the banks is not yet over as many Ghanaians think. This was hinted by Vish Ashiagbor, Senior Country Partner of PWC Ghana, during the “Business Focus” on TV3, yesterday.

The discussion was triggered by an economic prediction and COVID-19 economic impact report by PWC Ghana. The published report by PWC Ghana, explained the consequences of the pandemic on the banking sector, citing it as a serious concern for the banking sector in Ghana. According to the report published, there is going to be a lot of severe adverse impact such as job losses, credit losses, non -performing loans (NPL), and investment fees.

Vish Ashiagbor, Senior Country Partner of PWC Ghana

Even though the recent recapitalization policy strengthened the financial sector, it is expected that, Bank of Ghana will be responding to the COVID-19 fight by tightening the regulatory frameworks through effective monitoring and supervision, which will see more banks going down. According to Vish Ashiagbor, Senior Country Partner of PWC Ghana, the pandemic impact on businesses will result in many NPL and credit losses to the banks since customers may not be able to meet loan payment deadlines.

He said the banks should not just splash money into the economy but focus on releasing loans to only productive industries, if they want to survive after this pandemic. When customers’ money is invested in unproductive industries during this pandemic, there is going to be huge losses in the bank which will lock up funds. “I am not saying that customers’ should run for their money, instead banks who want to survive can put in place measures to sustain their activities”, Vish Ashiagbor noted.

From the published report, it was advised that there should be enhanced vigilance in the financial sector to minimize NPLs, credit losses and other weaknesses that will be exposed by this pandemic in the financial sector. Banks should intensify efforts in reducing their cost of operations and cyber security risks since many businesses are being conducted online.

Vish Ashiagbor hinted that, more banks will be running into troubles which will cause them to collapse in the next 7 months from now. In the next 7 months, banks that fails to adhere to the advises from PWC Ghana are likely to be no more. This prediction and report from PWC Ghana has started putting many people in confused state as customers don’t want to go through the suffering they were faced with last year. Currently, customers of the recent collapsed banks haven’t received their funds yet. Another collapse will be very devastating.

 

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