Coronavirus: Banks deferred GH¢3bn in loan repayments

Commercial banks deferred a little over GH¢3bn in loan repayments for customers as they battled the effects of the COVID-19 pandemic, the Ghana Bankers Association has said.

The Deputy Chief Executive of the Association, John Awuah, in remarks captured in the PwC 2020 Ghana Banking Survey report, said the banks had to go to the aid of customers who had been negatively impacted by the pandemic.

“A total of over GH¢3bn which should have been received by banks as loan repayments between March and June 2020 was not received as a result of the restructuring and reprofiling of loans to customers,” Mr. Awuah said.

Commenting on loans disbursed during the period, the Deputy CEO stated that an amount of GH¢3.6bn was approved and disbursed to customers, whereas GH¢1.1bn of drawdowns was allowed on existing legacy committed lines and GH¢2bn of new lines committed and made available during this uncertain period.

While Mr. Awuah praised banks’ response to the pandemic, he argued that the regulator could have engaged banks on some of the decisions introduced at the onset of the virus.

“The banking industry has kept faith with the regulator and the central government in ensuring the economy at large sails through this pandemic with minimal negative impact. We continue to engage our stakeholders for more guidelines and clarity on some of the already announced initiatives so that the desired outcomes are achieved and the economy brought back on track.”

Mr. Awuah’s remarks were reinforced by the majority of the top bank executives who responded to the survey. The respondents advised the Bank of Ghana to increase stakeholder consultation in order to propose more beneficial policies.

This, they said, will help estimate the timelines and extent to which the policies of the regulator will remain available. Some respondents simply thought that there was the need for detailed guidelines from the government and Bank of Ghana on the implementation of measures put in place to curb the impact of the pandemic.

In their view, clear guidance was missing, and though this could be shared during stakeholder consultation, they could not fully embed the new policies in operational strategy without a detailed documented directive.

Post-pandemic banking

When asked by the audit firm about how the pandemic’s outbreak had transformed their operations, the bank chiefs responded that the immediate response was to enforce remote working while realigning workers’ roles.

While the majority, 69 percent, of respondents indicated that remote working will become a permanent option going forward, there was general consensus that the new norm will ultimately lead to the shedding of workers whose jobs have become automated.

“Most banks intend to permanently incorporate remote working as an option available to staff based on their roles. 12.5% of banks confirmed that they have already begun and will continue to realign the job roles and work team structures to the new way of working in order to maximise efficiencies of digital banking, and ensure less-paper operations and requirements for social distancing. In the long run, these measures may result in possible layoffs for some whose jobs become automated,” the report said.

Commenting on the findings of the survey, which was on the theme “The new normal: banks’ response to COVID-19”, PwC’s Country Senior Partner, Vish Ashiagbor, cautioned that for workers that survive the digital progression, they have to upgrade their skills to remain relevant.