Mr Philip Owiredu BANKS in the country will require some magic to deliver a strong performance in the second quarter, the Managing Director of CAL Bank, Mr Philip Owiredu, has stated.
He said if COVID-19, which was serious in just one month in the first quarter, could have a negative impact on the performance of banks, then three months of COVID-19 would definitely hit the banks harder.
The latest report of the Bank of Ghana on the banking sector indicated that although the sector performance improved at the end of March 2020, there were emerging signs that the impact of the COVID-19 pandemic was beginning to weigh on the industry’s performance adversely.
The report shows that the growth rates in the key performance indicators of the sector contracted in the first quarter of 2020, compared to the same period in 2019.
Total assets grew by 3.5 per cent in first quarter 2020, lower than the 5.7 per cent growth recorded in first quarter 2019. In addition, deposits, credit, investments and profit-after-tax recorded similar lower growth rates.
In an interview with the Graphic Business, Mr Owiredu said: “If we want to see the banking sector performing stronger than this in the second quarter, then we must be doing some magic.”
“If COVID-19, which within the first quarter impacted us for one month, had a negative impact on the sector, then how much more the three months in the second quarter. I don’t expect a significant deterioration in the performance but we will definitely be hit,” he stated.
He said what was, however, important to look out for was the asset quality because at the moment, with the challenges that businesses were facing, asset quality would be key.
“Some banks probably, based on their pipelines that they had which would have fallen through in the second quarter, might be able to see enhanced performance compared to the previous quarter, but generally that trend in the first quarter will continue in the second quarter,” he noted.
Banking going more digital
The managing director also pointed out that banking around the world was going digital although there would still be some elements of person-to-person transactions.
“We should see a significant increase in digitisation of services, and increasingly we are going to see a lot of trends towards digitisation of more of the products and services of banks,” he said.He said although banks would still be physically present, the growth in […]