Nigeria’s Guaranty Trust (GT) Holding Company has announced a slowdown in lending and bond trading in Ghana due to a $77 million loss. The bank’s Chief Executive Officer, Segun Agbaje, has stated that the harsh operating environment and high inflation rate in Ghana makes it difficult for businesses to make money and pay back loans. Instead, the bank will focus on other high-yielding African markets to boost lending by 15% in 2023.
The bank is facing a tough time in its second-biggest market, Ghana, due to the country’s restructuring of most of its public debt worth $49 billion. Ghana exchanged notes worth ¢87.8 billion that paid an average of 19%, with bonds returning as little as 8.35%, causing losses for financial institutions.
As a result, GT Bank will expand credit by not more than 5% in Ghana and limit itself to treasury bills for securities investments. The bank had 167.6 billion naira of debt securities in Ghana, while rival lender Zenith Bank set aside 123.4 billion naira to account for the restructuring.
GT Bank’s decision to slow down lending and bond trading in Ghana is a significant blow to the country’s financial sector. The move is likely to affect small and medium-sized businesses that rely on loans from the bank to operate. It is also a reflection of the challenging economic climate in Ghana and the impact of the country’s debt restructuring on financial institutions.
In conclusion, GT Bank’s decision to focus on other high-yielding African markets is a prudent move in light of the challenges facing the Ghanaian economy. However, the bank’s decision to limit lending and bond trading in Ghana will have a significant impact on the country’s financial sector. It is essential for Ghana to address its debt restructuring challenges to restore confidence in the financial sector and attract more investments.