You Are The Cause Of Huge Losses In Government Securities - Senior Legon Lecturer To Banks

Due to the high concentration of their portfolios in Government of Ghana securities, banks are to blame for the astronomical losses recorded in their accounts.

According to Dr. Benjamin Amoah, a Senior Finance Lecturer at the University of Ghana Business School, the banks must pay for neglecting to engage in financial intermediation.

According to their 2022 Audited Financial Statements, the majority of Ghanaian institutions incurred losses in 2018. This is a consequence of the Domestic Debt Exchange Programme's influence on their operations.

Dr. Amoah told Joy Business that banks must acknowledge that they have not done much in terms of financial intermediation.

It is essentially a reflection of the portfolios the bank has created over time in an effort to generate shareholder interest.

"Clearly, these banks have been severely impacted due to their exposure to Government of Ghana bonds, which we now know have been re-weighted to 100% by the Bank of Ghana, indicating that the cash flows from these bonds are impaired. Dr. Amoah continued, "As a result, these banks must write-off these assets through their income statements, which translates into the losses that these banks are currently documenting and reporting to the public.

He added that it was outrageous that banks were earning more money from government securities.

Instead of lending more to the private sector, the banks were primarily generating income through investment income from Government of Ghana bonds, which is truly deplorable.