As the deadline for the Bank of Ghana approaches, banks in Ghana have started releasing their 2022 Financial Statements.
However, the Domestic Debt Exchange Programme (DDEP) has negatively impacted their profitability position, resulting in losses for many banks.
According to Joy Business, almost all of the banks that have released their statements recorded losses. Standard Chartered Bank, which recorded a loss of ¢66.4 million in 2022 compared to a profit of GH¢410.8 million in 2021, is among them.
Despite recording a staggering GH¢807.7 million interest income in 2022, the tier-one bank made an impairment of GH¢1.18 billion due to the effect of the DDEP.
Similarly, Republic Bank recorded a loss of GH¢66.8 million in 2022, posting a net interest income of GH¢370.6 million. However, a GH¢237 million loss in financial assets and other costs triggered the loss.
GCB Bank also suffered a loss of GH¢568 million in 2022, despite recording a net interest income of GH¢2.09 billion.
Parent companies of First National Bank, Stanbic, Zenith and Guaranty Trust Bank have already hinted at significant losses by their Ghanaian subsidiaries due to the impact of the DDEP on their operations, which will require an additional capital injection to turn things around.
Standard Bank, for instance, is ready to recapitalize its Ghanaian unit after making provisions to cover more than half of its holdings in the nation's debt.
FirstRand Limited, Africa‘s biggest bank by market capitalization, has also hinted at writing off more than half the value of its holdings of Ghanaian bonds as the country grapples with a restructuring of its sovereign debt.
The banks had also indicated that they would slow down lending until the Ghanaian economy improves.
This loss position means that shareholders may not enjoy dividends for the 2022 financial year.
However, Societe Generale Bank is one of the few banks that recorded a profit in 2022. The bank, which was less exposed to the Government of Ghana bonds, registered a profit of GH¢110.6 million, lower than the GH¢183.8 million recorded in 2021.
Earlier reports by Joy Business stated that banks in Ghana lost about GH¢15 billion in 2023 due to the DDEP.