Awards for Excellence 2020
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Ghana’s banking sector went through severe challenges in 2018 after the central bank’s asset quality review in 2017 revealed several structural challenges, including poor corporate governance, poor risk-management practices and regulatory non-compliance.
The central bank has embarked on a reform programme to clean up the banking industry and strengthening the regulatory and supervisory framework. As a result, the licences of nine banks were removed on the grounds of insolvency and three mergers took place.
Under chief executive Mansa Nettey, Standard Chartered Ghana has navigated these challenges, as well as the group’s internal strategy reset launched in 2015, to build a robust, resilient bank that wins this year’s award for Euromoney’s best bank transformation in Africa.
The bank’s efforts have resulted in a remarkable improvement in its asset quality, while ensuring a steady flow of credit to its customers.
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Mansa Nettey |
“Since 2015, we have focused on driving our core priorities, which included securing our foundations, getting lean and focused and investing and innovating; all of which have resulted in driving growth and the repositioning of our business,” wrote Nettey in the bank’s 2018 annual report. “We took deliberate action to de-risk our portfolio to ensure that we maintain a strong balance sheet to position us for growth.”
In 2017, the bank registered non-performing loans of 35%. By 2018, it had brought NPLs down to 25.16%, and by the end of 2019 this figure stood at 17.2%.
Loans and advances increased by 36% from C1.3 billion ($224.7 million) in 2018 to C1.8 billion in 2019, while deposits grew from C4.3 billion to C5.4 billion. The bank’s net interest income increased to C594.7 million from C488.8 million in 2018. In 2019, it recorded a profit for the year of C281.9 million, up from C210.7 million a year earlier. Its return on equity was 24.9%, up from 20.1% in 2018.
“Standard Chartered Ghana really stands out after the 2018 clean-up,” says Nkem Nwadialor, Africa financials analyst at Tellimer. “They’ve cleaned up the loan book, but are not shying away from new loans. They’re lending more and lending more prudently, and making strides digitally. It shows that the bank was able to re-evaluate and come out as a better operating bank.”
