The Managing Director of Stanbic Bank Ghana, Alhassan Andani has blamed the high non-performing loans (NPL) of banks in the country on debts owed by government to utility and oil companies in the country.
According to him, a large proportion of the NPL’s is owed by bulk oil distributing companies (BDC’s) and utility generators, distributors and providers.
Mr. Andani argues that government inability to pay these debts has affected the solvency of these banks.
Speaking to Citi Business News, the Stanbic Bank MD further asserted that banks are dissatisfied with the huge NPL’s sitting on its books.
“Nobody wants NPLs as they are a hardening of your assets which is supposed to be soft and running and earning you interests. NPLs are therefore not desirable anywhere with the banks. A large portion of the NPLs can be traced down the energy sector, that is the BDCs and VRA plus the power sector issues that are being deregulated and put on sound footing,” he stated.
Data issued by the bank of Ghana revealed that non–performing loans on the books of banks in the country increased by 59.9 percent from GH¢ 3.1 billion in March 2015 to GH¢ 4.9 billion in March 2016.
The nation’s power generator, the VRA is also reported to be owing some top banks in the country in excess of 4 billion cedis.
Government has since announced that it is restructuring the debt of the VRA.
This will see the maturity date extended while the interest rates dollar and cedi components will also be reduced.
Mr. Andani was speaking on the sidelines of the launch of Stanbic bank’s Achiever Banking – a digitally led customer value proposition tailor-made to meet the needs of success driven young professionals and middle class as they aim to reach the top of the corporate ladder.
According to the Head of Personal Markets at Stanbic Bank, Hannah Annobil- Acquah, the Achiever value proposition is designed for anyone who earns a regular income between GH¢700 and GH¢3,499.
The Achiever Life package is a retrenchment cover which offers customers GHC 1000 a month for three months in the event that they lose jobs.
It also includes a 10% discount on Motor Insurance as well as the Hospital Cash Cover with which the Bank supports clients GHC100 for 180 days, in case they are hospitalized after an accident.
The Achiever Cash package also comes with short term financing facilities such as a pre-approved overdraft of up to 50% of one’s net salary and access to lifestyle loans in less than 24hours.
The Achiever Pay package offers a myriad of cashless payment options through the bank’s VISA Card and other payment platforms such as Slyde Pay, E-ZWICH and Mobile Money.