In an apparent move to reduce the negative impact of Ghana’s debt crisis among others on their risks assets, eight banks recorded N502bn net impairment charges in 2022.
The provisioning showed a jump of 101.05 per cent compared with N249.75bn recorded in 2021.
An impairment charge usually reflects a fall in value or worse-than-expected performance of the asset.
While banks increased their lending partly due to the Central Bank of Nigeria’s policy on loan-to-deposit ratio (LDR), which is put at 65 per cent, the Ghana’s sovereign debt crisis and slow down in global economy that disrupted economic activities, affected most risk assets.
Records showed that the eight banks that increased their impairment charges are: Access Holdings Plc; Ecobank Transnational Incorporated Plc; FCMB Group Plc; Guaranty Trust Holdings Company Plc; Stanbic IBTC Holdings Plc; United Bank for Africa Plc and Zenith Bank Plc.
Besides, the World Bank, among other international have sustained pressure on the Federal Government on the need to remove all forms of subsidy on petrol in a move harmonise the foreign exchange rate.
It was observed that some banks raised their net impairment charges significantly in the year under review, while the total provisioning by banks rose by 101.05 per cent.
Access Holdings recorded a jump of 137.7per cent in net impairment charges, from N83.2bn in 2021 to N197.79bn in 2022.
GTCO posted net impairment charges of N35.94bn, showing a jump from N760m recorded in 2021, while Zenith bank announced N123.25bn net impairment charges in 2022 from N59.9bn recorded in 2021.
Ecobank posted net impairment charges of N89.13bn, indicating a decline of 5.1 per cent from the 2021 figure. Union Bank announced N3.01bn net impairment charge in 2022 from N34m on reversal for credit losses in 2021.
Stanbic IBTC Holdings, which had a write-back of N1.51bn in 2021, made a provision of N10.29bn in 2022.
Analysts said the higher impairment charges did not come as a surprise given the headwinds in the domestic and external economy in 2022, crisis in Ghana economy, among other factors.