Banks’ profit falls …as bad loans, power take toll on operations

For three years the banking sector withstood economic challenges, but now the sector appears to have caught an economic cold. The sector is showing signs of economic stress with key performance matrix decelerating for 2015 in sharp contrast to last the three years of buoyant earnings and profitability.

Profit growth has sagged while cost of operation has risen and non-performing loans have reached new heights. For the past three years, economic growth in terms of GDP has spluttered, falling from a record high of 14 percent in 2011 to about 4.1 percent in 2015.

But after a protracted economic malaise in which the banking sector rode the storm, key indicators of banks’ profitability, as published by the Bank of Ghana’s Financial Stability report, have showed some deterioration for the period ended September 2015.

The report showed that growth in the sector’s income before tax declined sharply from 54.4 percent in September 2014 to 5.9 percent in September last year. The drastic decline in the banks’ fortunes, according to the central bank, reflects challenges the economy has been facing; with the protracted energy crisis leading the onslaught.

The central bank stated that key matrix which measured the efficiency of the sector’s efficiency, cost to income ratio, showed some deterioration in efficiency. Cost to income ratio in the period ending September 2015 was 80.8 percent as compared to 75.4 percent in September 2014.

The increase in the cost to income ratio came as a little surprise, especially at a time when the power crisis was in full force and banks had to spend fortunes to fuel power plants to ensure banking operations flowed seamlessly.

Within the period in review, total assets of the banking sector grew by19.7 percent to GH¢57.23 billion as at end September 2015, compared with a much improved performance of 41 percent recorded in 2014.

Credit to the private sector also grew by 3.6 percent at end of September 2015compared with the 26.6 percent growth at the end of September 2014. Credit to the households also grew — by 4 percent in September 2015 compared with 19.8 percent growth recorded in the same period for 2014.

The energy crisis and tightening of monetary policy by the central bank took a toll on creditors, mainly businesses — forcing them to default in their payments to the banks. In 2014 non-performing loans (NPLs) were 12.1 percent, but this increased to 13.5 percent last year.

Of the total non-performing loans, credit to the private sector contributed 97.4 percent while the rest was borne by the public sector.

But the International Monetary Fund (IMF) expressed concern about the growing incidence of NPLs in the sector; saying that the increase in non-performing loans indicates the importance of adequate provisioning practices and the need to hold sufficient capital buffers to absorb further increases in NPLs.

The Fund in its January report on the country advised the BoG to immediately increase provision levels and address the weaknesses in asset classification that were uncovered in the recent audits.

“The authorities should also insist on Parliament urgently adopting the banking laws (in any case no later than June 2016). These bills are essential to ensure that the authorities have adequate bank resolution and crisis management powers,” the Fund said.

But the Bank of Ghana is confident the power barges coming on-stream will help the banks recover from the energy challenges and improve on their profitability position.

“Again, the diagnostic study initiated by the Bank of Ghana on banks’ loan books and operations is expected to moderate non-performing loans in the sector,” the central bank assured in its report on the financial services sector’s stability.

Source: B&FT Online

GSE snapshot: 4 losers and zero gain [Friday February 5, 2016]

GSE closes with 4 losers and zero gainer on Friday February 5, 2016.

  • Volume Traded was 833,928.00
  • Market Capitalization was 56,388.58 million cedis
  • All Share Index was 1,972.19 pts
  • Index Change was 8.88pts (lost)
  • Year-to-Date of 1.14%

At the end of Friday’s trading session, 833,928 shares valued at GH¢3,439,613.59 were traded.

Fifteen equities traded with four losers and zero gain. SIC, ETI, SOGEGH and GOIL lost one pesewa to close at GH¢0.19, GH¢0.24, GH¢0.83 and GH¢1.44 per share respectively.

As a result of these price changes, the GSE Composite Index lost 8.88 points to close at 1,972.19 representing a year-to-date loss of 1.14%.

Stock market analysts predict a further depreciation of the GSE-CI by some 4.00 representing 0.2% points at the end of Monday’s trading.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot: 2 losers and 1 gainer [Thursday February 4, 2016]

GSE closes with 2 losers and 1 gainer on Thursday February 4, 2016.

  • Volume Traded was 1,467,486.00
  • Market Capitalization was 56,637.00 million cedis
  • All Share Index was 1,981.07 pts
  • Index Change was 3.17pts
  • Year-to-Date of 0.69%

At the end of Thursday’s trading session, 1,467,486 shares valued at GH¢5,103,421 were traded.

Fourteen equities traded with two losers and one gainer. MLC and GCB lost one pesewa to close at GH¢0.20 and GH¢3.70 per share respectively. On the other hand, SIC gained one pesewa to close at GH¢0.20 per share.

As a result of these price changes, the GSE Composite Index lost 3.17 points to close at 1,981.07 representing a year-to-date loss of 0.69%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot:6 losers and 2 gainers [Wednesday February 3, 2016]

GSE closes with 6 losers and 2 gainers on Wednesday February 3, 2016.

  • Volume Traded was 158,596.00
  • Market Capitalization was 56,654.00million cedis
  • All Share Index was 1,984.24 pts
  • Index Change was 3.28pts (lost)
  • Year-to-Date of – 0.53%

At the end of Wednesday’s trading session, 158,596 shares valued at GH¢ 905,873.94 were traded.

Sixteen equities traded with six losers and two gainers. SOGEGH, EGL, PZC, PBC, and CAL lost one pesewa to close at GH¢0.84, GH¢2.40, GH¢0.31, GH¢0.09 and GH¢0.94 per share respectively, whilst EGL also lost two pesewas to close at GH¢7.05 per share.

On the other hand, SCB gained four pesewas to close at GH¢16.34 per share, whilst BOPP gained one pesewa to close at GH¢3.06 per share.

As a result of these price changes, the GSE Composite Index lost 3.28 points to close at 1,984.24 representing a year-to-date loss of 0.53%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot: 1 loser and 1 gainer [Tuesday February 2, 2016]

GSE closes with 1 loser and 1 gainer on Tuesday February 2, 2016.

  • Volume Traded was 1,213,236.00
  • Market Capitalization was 56,672.54 million cedis
  • All Share Index was 1,987.52 pts
  • Index Change was 4.67pts (lost)
  • Year-to-Date of – 0.37%

At the end of Tuesday’s trading session, 1,213,236 shares valued at GH¢728,693.24 were traded. Eight equities traded with one loser and one gainer. CAL lost one pesewa to close at GH¢0.95 per share. Whilst SIC gained one pesewa to close at GH¢0.19 per share. As a result of these price changes, the GSE Composite Index lost 4.67 points to close at 1,987.52, representing a year-to-date loss of 0.37%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot: 4 losers and 1 gainer [Monday February 1, 2016]

GSE closes with 4 losers and 1 gainer on Monday February 1, 2016.

  • Volume Traded was 520,644.00
  • Market Capitalization was 56,698.00 million cedis
  • All Share Index was 1,992.18 pts
  • Index Change was 11.94 pts (down)
  • Year-to-Date of – 0.14%

At the end of Monday’s trading session, a total of 520,644 shares valued at GH¢127,646.39 were traded. Fourteen equities traded with four losers and one gainer. CPC, ETI and SIC lost one pesewa to close at GH¢ 0.01, GH¢0.25 and GH¢0.18 per share respectively, Whilst FML also lost three pesewas to close at GH¢7.35 per share. On the other hand, HFC gained two pesewas to close at GH¢0.21 per share. As a result of these price changes, the GSE Composite Index lost 11.94 points to close at 1,992.18 representing a year-to-date loss of 0.14%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot: 2 losers and 2 gainers [Friday January 29, 2016]

GSE closes with 2 losers and 2 gainers on Friday January 29, 2016.

  • Volume Traded was 123,749.00
  • Market Capitalization was 56,963.50 million cedis
  • All Share Index was 2,004.12 pts
  • Index Change was 2.17 pts
  • Year-to-Date of 0.46%

At the end of Friday’s trading session, a total of 123,749 shares valued at GH¢48,848.63 were traded. Fourteen equities traded with two losers and two gainers. CAL and HFC lost two pesewas and five pesewas each to close at GH¢1.00 and GH¢1.05 per share respectively. On the other hand, BOPP and SIC gained three pesewas and one pesewa each to close at GH¢3.05 and GH¢0.19 per share respectively. As a result of this price change, the GSE Composite Index lost 2.17 points to close at 2004.12 representing a year-to-date gain of 0.46%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot: 1 gainer and zero losers [Thursday January 28, 2016]

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GSE closes with 1 gainer and zero losers on Thursday January 28, 2016.

  • Total Volume Traded was 20,428.00
  • Market Capitalization was 109,718.46 million cedis
  • All Share Index was 2,006.29 pts
  • Index Change is 0.36 pts
  • Year-to-Date of 0.57%

At the end of Thursday’s trading session, a total of 20,428 shares valued at GH¢109,718.46 were traded.

Five equities traded with one gainer and no losers. On the other hand, SIC gained one pesewas to close at GH¢0.18 per share. As a result of this price change, the GSE Composite Index gained 0.36 points to close at 2,006.29 representing a year-to-date gain of 0.57%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

GSE snapshot: 1 loser and 2 gainers [Wednesday January 27, 2016]

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GSE closes with 1 loser and 2 gainers on Wednesday January 27, 2016.

  • Total Volume Traded was 116,543.00
  • Market Capitalization was 56,973.41 million cedis
  • All Share Index was 2,005.93 pts
  • Index Change is 7.74 pts
  • Year-to-Date of 0.55%

At the end of Wednesday’s trading session, a total of 116,543 shares valued at GH¢45,610 were traded. Twelve equities traded with one loser and two gainers.  SIC and ETI gained one pesewa to close at GH¢0.17 and GH¢0.26 per share respectively. On the other hand, TLW lost one pesewa to close at GH¢27.99 per share.

As a result of these price changes, the GSE Composite Index gained 7.74 points to close at 2,005.93 representing a year-to-date gain of 0.55%.

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

 

Prudent financial planning: A key to good living.

download.jpgGetting in good financial shape can pay off really well! Spending wisely, saving what you can, managing debt effectively, paying bills on time, investing, and having some money safely put away can make you feel real good.

Also knowing that, where your money is going may mean more money for you to enjoy the things that are really important to you makes you feel fabulous!  You want to feel good about your money no matter where you are in life: whether you are saving for your first home, sending your children to the University, or planning for longer-term goals, like retirement.

Prudent financial planning is a key to happiness. The rule is to: “Stick to Your High Standards and Gut Feeling, Regardless!”

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you, please contact your financial adviser.

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