Victor Yaw Asante, the Chief Executive Officer and Managing Director of FBNBank, has stated that it is a challenging time for the banking and financial industry in the country as a result of the unfavorable economic conditions currently bedeviling the country.

Specifically, the Chief Executive Officer and Managing Director of FBNBank singled out the rising inflation and higher interest rates as the ones affecting banks in the country.

“Banks are worried; interest rates are going up, inflation is 33.9 per cent now, the Ghana reference rate at the moment is around 26 per cent. This is challenging times for the banks.”
Victor Yaw Asante

Mr Asante, meanwhile, highlighted how the banking industry is faring in view of the difficult economic situation, noting that the banks have put their hopes in the government’s International Monetary Fund programme for an amount of $3 billion, to among others, shore up its revenue and meet its balance of payment obligations. He thus, iterated that “It is a worrying situation for the bank’s now.”

Banks Going through Tough Times

Mr Asante stressed that banks are going through tough times. As if the current situation is not enough, he said, “In view of the difficult economic conditions, people did all manner of things in cyberspace in a bid to break into the systems of banks.”

“This means that you must spend a lot of money, do a lot of diligence, and make sure all your systems are at the top level.”
Victor Yaw Asante

The CEO of FBNBank also averred that the rising interest rates and inflation are passed to financial institutions, stressing “You can’t pass all your interest cost to clients, because if you are not careful, you will lose out.”

Mr. Asante noted that banks are seeing signs of a bit of struggle in some of the corporates “Who are asking all manner of things.”

“We are working with our clients who need a little bit of restructuring to help cushion them in meeting their loans obligations.”
Victor Yaw Asante

Mr Asante is of the hope that the government would overcome the challenges the economy is going through.

“We are all in trouble, but I pray, sooner than later, all the factors that are going in the wrong direction will change into the right direction.”
Victor Yaw Asante

A similar sentiment was shared by Vice President of IMANI Africa, Bright Simons. He painted a bleak picture about the state of Ghanaian banks, citing the country’s fiscal system as the reason. Bright Simons noted that some banks are on the verge of insolvency due to the government’s inability to protect the country’s fiscal space.

Bright Simons explained that the situation as it is will cause “catastrophic problems” for the economy and the government will need more than its projected $1 billion for a financial sector clean-up.