Commercial Banks In Ghana Research Articles

The Effect Of Non-Performing Loans On The Financial Performance Of Commercial Banks In Ghana

Non-performing loans (NPLs) are considered financial pollution as a result of their high risk and effect on the profitability and liquidity of banks. The study examines the effect of non-performing loans on the financial performance of commercial banks in Ghana. The study is guided by the following research objectives: examining the level of NPLs of commercial banks in Ghana, examining the relationship between loan-to-deposit ratio and profitability and determining the relationship between NPLs and the financial performance of selected commercial banks. The data for this study was obtained from financial institutions from 2010 to 2021. The NPL rate shows some volatility but generally decreases from 2010 to 2014. It reached its lowest point in 2014 at 11.3%. However, from 2015 to 2017, there was a notable increase in the NPL rate, with a peak of 21.59% in 2017. The findings show that non-performing loans have a positive and significant relationship with ROA. The finding indicates a positive and significant relationship between loan deposit ratios. The study recommends the need to implement strong risk management practices to identify and mitigate potential credit risks proactively. This includes monitoring and early detection of deteriorating loan accounts, regular portfolio reviews, and stress testing. By identifying high-risk loans early, banks can take timely actions to mitigate potential losses and prevent loans from becoming non-performing. Also, management has to invest in training and development programs for loan officers and credit staff. Ensure they have the necessary skills and knowledge to accurately assess creditworthiness, detect warning signs, and effectively handle loan monitoring and collections.

Corporate Governance Dynamics and Financial Performance: Analysis of Listed Commercial Banks in the Ghanaian Context"

This study aims to determine the effect of corporate governance on the financial performance of 14 listed commercial banks in Ghana. The research employs a panel data set from 2008 to 2020 to examine how board size, ownership structure, board independence, capital adequacy ratio, audit committee effectiveness, board gender diversity, and overall corporate governance score affect ROA and ROE for banks. These relationships are analyzed using Ordinary Least Squares (OLS) regression within the framework of panel data analysis. Results indicate that ROA is positively related to board size, board independence, audit committee, and Board gender diversity. Also, ROE is positively influenced by companies’ ownership structure, capital adequacy ratio, audit committee effectiveness, and overall corporate employment governance rating. However, there is a significant negative correlation between ROE and women’s representation or board gender diversity. Also, another key finding is that both Return on Assets (ROA) and Return on Equity (ROE) are significantly affected by debt and debt-to-equity ratios. This indicates that banks borrowing more have reduced profitability, underlining the need for a well-managed capital structure and no over-reliance on loans. This study contributes to the understanding of the relationship between corporate governance and performance in the banking sector of Ghana, emphasizing that high-quality governance systems can improve and enhance financial performance. The insight gained from this analysis shows that Banks should aim towards good corporate governance practices such as; maintaining proper board size, promoting greater board independence, ensuring efficient audit procedures, and encouraging more gender diversity to enhance profitability. The outcomes also emphasized a well-built base of capital and concentrated ownership, enabling better financial results.The outcomes of this research are useful to Ghanaian policymakers, regulators, and bank executives who view the need for strong corporate governance environments to buttress the stability and growth of the banking sector.

The Institutionalization of the Product of Financial Engineering Techniques on Listed Commercial Banks in Ghana

Well-considered financial engineering initiatives are what propel company success and general economic growth. This book aimed to improve knowledge of financial instruments used in project financing and the financial engineering process; however, no research has been done on the influence of financial engineering on the financial performance of commercial banks in Ghana. This study employed a descriptive survey design and a quantitative methodology to gather information on the influence of financial engineering on building project financing in Ghanaian commercial banks. The treatise concentrated on the banking industry with a spotlight on banks listed on Ghana Stock Exchange with operations in the Accra Metropolitan Assembly only, and both primary (questionnaire) and secondary (audited financial records) data were employed to analyse the treatise. The secondary data were analysed descriptively, while the analysed data were analysed proportionally. The regression technique was adopted to explore the relationship between financial engineering and building project finance. The results show a significant but negative association between the project finance market and project finance. Also, there was a powerful but positive association among the selected commercial banks between project finance instruments, market innovation and project finance. The treatise concludes that commercial banks in Ghana have adopted various financial engineering strategies to improve project finance and, by extension, financial performance. This treatise recommends that commercial banks in Ghana employ product innovation strategies such as product range extension, product replacement, product improvement, product repositioning and new product introduction to enable the banks to be more productive, grow faster, invest more and earn more profit.

Analyzing the Impact of Loan Portfolio Management on the Financial Performance of Publicly Traded Banks in GhanaBottom of Form

The banking sector is pivotal for economic growth and development, primarily through its roles in financial intermediation, providing an efficient payment system, and supporting monetary policy execution. Over the past decade, the performance and profitability of Ghanaian banks have significantly improved. This study aimed to bridge the knowledge gap by examining the factors influencing the performance of commercial banks in Ghana. Key factors analyzed included loan portfolio management, interest expenses, administrative costs, and asset values. A descriptive survey design was utilized, focusing on management employees from commercial banks in Ghana. The sample was selected using both stratified and simple random sampling techniques, and data were collected through self-administered questionnaires. The Statistical Package for the Social Sciences (SPSS) was employed for analyzing primary data, while secondary data were sourced directly from the banks. The study revealed that fluctuations in interest margins had minimal impact on the profitability of both public and private sector banks, indicating that their profitability growth is relatively independent of interest rate changes. However, foreign banks benefited from higher returns due to these interest margin fluctuations.

Assessing the Impact of Electronic Banking on the Financial Performance of Commercial Banks in Ghana

Assessing the Impact of Electronic Banking on the Financial Performance of Commercial Banks in Ghana

An Assessment of Selected Ghanaian Banks’ Internal Control and Corporate Governance

The general objective of the study is to assess the effectiveness of internal control and corporate governance in the Ghanaian banking industry. The study was basically a case study based and was approached quantitatively. Five banks (Absa Bank Ghana, Ecobank, Standard chartered Bank, Agricultural Development Bank, and Ghana Commercial Bank) were sampled for the study. Four hundred (400) respondents from the above sampled banks helped offer meaningful and enough information to answer the study questions. Non-probability sampling was used for this study’s sample strategy. The study made use of questionnaires to gather the data. In analyzing the data, the study made use of descriptive statistics, Kendall’s coefficient of concordance (w), correlations and regression analysis techniques. The study found that internal controls and corporate governance in the Ghanaian banking industry are effective. The results of the study confirm that internal auditors and staff have the role to review systems established to ensure compliance with policies, procedures, plans, laws, and regulations impacting operations and reports; to detect and prevent illegal practices; to report illegal acts; provide information to management; act with competence; make a report to the company about the problems and follow the corporate policy in ensuring effective internal control in the Ghanaian banking industry. Keywords: Compliance, Corporate governance, Corporate policy, Internal Control, Kendall’s coefficient of concordance (w).

The mediating effect of going concern and corporate reporting in the relationship between corporate governance and investor confidence in financial institutions

This study investigates the mediating role of going concern and corporate reporting on the relationship between corporate governance and investor confidence in financial institutions. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 3 to analyze the data. The data for the study was collected from financial statements of selected commercial banks in Ghana, Nigeria and South Africa. The results indicate that corporate reporting partially mediates the interrelationships between corporate governance, going concern, and investor confidence. Conversely, there is neither mediation effect of going concern on the association between corporate reporting and investor confidence, nor between corporate governance and investor confidence. The results of the study have practical implications for financial institutions looking to maintain investor confidence and promote financial stability. The results also have policy implications for policymakers and regulators that oversee financial institutions. Knowledge in the field of corporate reporting and governance theoretically also is extended by highlighting the importance of transparency and disclosure in corporate reporting practices. In all, this study contributes to the literature on corporate governance and reporting by providing new insights into the mechanisms by which corporate reporting and going concern impact corporate governance and investor confidence in financial institutions.

The Impact of Firm Size on Financial Decision-Making: Evidence from Ghana

The study's primary goal was to ascertain the influence firm size has on Ghanaian banks' financial decision-making. A quantitative technique was applied in the study. The study's secondary data came from the financial statements of five commercial banks. Ghana Commercial Bank, ADB Bank, SG-Ghana Bank, Zenith Bank, and Fidelity Bank. These commercial banks were chosen using a purposive sampling technique. A sample size of 50 was used to collect data for each bank from 2012 to 2021, yielding ten records for each bank. A double log panel regression model was used to analyze the relationship between financial decisions and some key financial performance indicators (KPIs), with the financial decision being the outcome variable whiles return on assets, leverage, total debt, total equity, firm size (Bank size) and time the predictor variables. The Haussmann test was then performed to select the most appropriate model for the banking panel data.
 Based on the test result (chisq = 2.6279, df=3, p = 0.4526), the FEM was selected. The results showed that return on assets had no significant relationship with financial decision-making. Leverage was found to be significantly related to financial decisions, but the influence was minimal. Firm size had the most influence on financial decisions and by far the most significant influence regarding which capital structure to maintain as a bank. Total debt played a significant positive role in financial decisions. The higher the total debt, the more debt the banks tended to take on. As a response, the study proposes that Banks relying on internal funds to finance their operations must do so efficiently and effectively to derive the benefits associated with firm size. On the other hand, banks relying on debt financing must do so with caution since there is the risk of interest escalating in the current economic climate.

Customer relationship management practices and organisational performance of commercial banks in Ghana: a mediation analysis

Customer relationship management practices and organisational performance of commercial banks in Ghana: a mediation analysis

Commercial banks’ profitability and portfolio management in Ghana

Purpose: The primary goal of the research was to assess the relationship between Ghanaian commercial banks' profitability and portfolio management. Research methodology: All nine of the Ghana Stock Exchange (GSE)'s listed banks were included in the population of this descriptive study. All nine banks were sampled. This study only considered data from financial statements and bank reports covering the five-year period between 2016 and 2021. Results: Results showed that asset investment has a positive effect on the financial performance of commercial banks in Ghana. Additionally, a positive effect of the loan portfolio on the commercial banks’ financial performance was found. It was finally discovered that asset investment affects the banks’ financial performance in a significantly positive way. Limitations: The study was limited to nine banks listed on the GSE. Contribution: It was concluded that when there is a good loan portfolio management policy, banks perform well and are profitable. Consequently, it is advised that top management and other stakeholders play a crucial role in achieving strategic goals by championing best practices in portfolio management and evaluating the sufficiency of effective portfolio management factors in an unbiased manner.

Risk management practices of commercial banks in Ghana

Risk management practices of commercial banks in Ghana

The Impact of Corporate Governance and Financial Disclosure on Financial Performance: A study of panel data from 18 Commercial Banks in Ghana.

The paper examines the impact of corporate governance and financial disclosure on the financial performance of banks in Ghana. Corporate governance was measured by three variables: board size, CEO duality, and board composition. Financial disclosure was also measured by timeliness, bank size, and quality of auditors. Financial performance, as the dependent variable, was measured by return on assets (ROA), and return on equity (ROE). The study used panel data from 18 commercial banks operating within the Ghanaian banking industry, both listed and unlisted, over a ten-year period (2009 to 2018). A random-effects regression model was used, and the results revealed that board size, timeliness, and quality of auditors were statistically significant and positively related to return on assets. Board composition, however, had a significant negative relationship with return on assets. There was no significant association between bank size and return on assets. Moreover, the findings of the study showed that board size and bank size had a positive and significant relationship with return on equity. Board composition and timeliness were however negative and statistically related to the return on equity. There was no significant nexus between the quality of auditors and return on equity. The study findings place emphasis on the combined effect of corporate governance and financial disclosure on financial performance, particularly within the banking industry in Ghana. Keywords: Corporate Governance, Financial Disclosure, Financial Performance, Commercial Banks.

An empirical investigation of the impact of social media tool usage on employees work performance among Ghana Commercial Bank Workers

Goal: The motivation of this paper is to forge and foster an insightful and comprehensive understanding of social media potential and its possible impact on Ghana Commercial Bank employees’ performance. Design / Methodology / Approach: Five cities were strategically sampled using convenient sampling technique to represent the various diversifications in corporate compositions. Data was collected from 249 workers of the Ghana Commercial Bank. The study utilized the structural equation modeling technique to construct and evaluate the proposed research model. Results: Social media usage had a significant positive relationship with employee engagement and knowledge transfer. Knowledge transfer had no significant relationship with work performance and employee engagement had a significant positive relationship with work performance. Experience with social media had a significant moderating effect on relationship between knowledge transfer and work performance. Research limitations/implications: The study covered employees from one bank and this has implications on generalization. The study used cross sectional data and employed quantitative analysis. Mixed methods would have added some insights and longitudinal data could further unravel causal relationships among overtime. Practical implications: Social media platform managers and policy makers within the banking sector should proactively harness social media platform and utilize to benefit corporate bodies. Banking authorities and allied stakeholders should train workers to ensure positive inclination to social media usage. Originality/Value: Contributes to theory by validating and establishing the theoretical model. The findings provide insights with respect to development and subsequent deployment of practical guidelines for successful integration of social media in enterprise activities.

Effect of Credit Risk on Odds of Occurrence of Financial Crisis: Evidence from Ghana

Purpose: Credit risk has been stated in extant literature to be one of the predictors of financial crisis. Nevertheless, stakeholders of Ghana’s financial sector seemed to pay less attention to the possible relationship between credit risk and financial crisis; possibly due to the limited empirical studies in this area. This study, therefore, assessed the effect of credit risk on the odds of occurrence of financial crisis among commercial banks in Ghana, employing annual data for the period 2010 – 2019 from 22 commercial banks selected using the criterion sampling technique.
 Methodology: The study was quantitative in nature, and employed the explanatory design. The binary logistic regression technique was used for the estimation of the relationship between credit risk and financial crisis.
 Findings: It was revealed that credit risk has a significantly negative effect on the odds of occurrence of financial crisis among commercial in Ghana.
 Recommendation: It was therefore recommended that management of commercial banks in Ghana pay attention to bank clients and their demands, level of risk to take, as well as risk management techniques, to ensure that the right decisions are taken at all times.

THE EFFECT OF THE COVID-19 PANDEMIC ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN GHANA

This study examines the effect of the covid-19 pandemic on the profitability of commercial banks in Ghana. The study sampled 24 commercial banks over a 5-year study period from 2017 to 2021. The study collected data from the annual report of these banks. The study measured bank profitability using return on assets and return on equity. The main dependent variable was the covid-19 pandemic, measured as a dummy variable. The study relied on descriptive statistics, correlation analysis, and panel regression analysis to realize the research objectives. The correlation analysis, as well as the panel regression analysis, revealed that there is a positive coefficient between covid-19 pandemic and the return on assets of commercial banks in Ghana. The positive coefficient between covid-19 pandemic and return on assets is statistically significant at a 1% significance level which implies that covid-19 is a significant determinant of the increase in return on assets among commercial banks in Ghana. The correlation and panel regression analysis showed a positive relationship between covid-19 pandemic and returned on equity. However, the positive relationship between covid-19 pandemic and return on equity is not statistically significant, implying that the covid-19 pandemic is not a significant predictor of the changes in return on equity among commercial banks in Ghana.

Investigating the impact of credit risk on financial performance of commercial banks in Ghana

The financial performance of banks across the globe is of utmost importance to its shareholders, managers, investors, regulators, and the general public. This study therefore investigates the impact of credit risk with focus on non-performing loans on the financial performance of commercial banks in Ghana. Return on asset and economic value-added are used as measures of financial performance. Internal bank factors such as the age and size of the bank are also considered. Macroeconomic factors such as gross domestic product, inflation, and monetary policy rate are included in the analysis. Panel data spanning the period 2013 to 2018 on 15 commercial banks in Ghana is used for the analysis. The results from the random effect estimation technique show that non-performing loans have a negative impact on both measures of financial performance. Also, monetary policy rate has a negative impact on both measures of financial performance, albeit insignificant for economic value-added measure. It is further revealed that the size of bank, age of bank, and gross domestic product have a significant positive effect on both measures of financial performance although significant for return on asset. Based on the negative relationship between non-performing loans and financial performance, it is suggested that commercial banks should adopt stringent credit risk management policies, which should also be updated regularly to guide actions and processes to granting of loans and monitoring credit risk. Furthermore, it is suggested that the value of depreciable assets pledged as collaterals to the banks should be reviewed frequently (probably annually) to reflect a decline in their value. The novelty of the present study pertains to the use of economic value-added as a financial performance measure, which previous studies have virtually ignored in the analysis of credit risk and financial performance nexus.

Effect of ICT on the financial achievements of Atwima Kwanwoma rural bank, Ashanti region

Information and communication technology has for the last four decades become very popular with major commercial banks in Ghana. Presently, rural banks in Ghana have also computerized and networked their operations. Atwima Kwanwoma rural bank, with the support of Bank of Ghana, has helped embark on nationwide computerization of all the banks in Ghana. This research study aims to examine the impact of information technology on the financial performance of Atwima Kwanwoma rural bank in the Ashanti Region. Perceptions of the management staff of the bank, branch managers, staff members and customers were collected using a survey method.In all 40 people were sampled from Atwima Kwanwoma Bank. Questionnaires were used to collect data randomly from the customers and staff of the Bank. Two types of questionnaires were prepared and distributed among staff and customers. Both semi-structured and 6-point Likert scale questionnaire were developed. Data findings established that information technology has a positive linear relationship with the financial performance of banks. The study concludes that we can say information technology has a positive impact on the image, goodwill and growth of Atwima Kwanwoma rural bank.The study recommends that customers should be prioritized by Atwima Kwanwoma rural bank before information technology. It is vital to set the needs and wants of customers first before you introduce any technological program or device.

The Effect of Risk-Based Auditing on Value-Based Financial Performance of Banks in Ghana

This study analyzes the effect of risk-based auditing on value-based financial performance of banks listed on the Ghana stock exchange. The study utilized a cross-sectional and quantitative research design. The study population encompasses listed banks in Ghana Stock Exchange (GSE) for the study period spanning thirteen years (2008 to 2020) owing to data availability. The study used a judgemental sampling technique to select nine (9) banks out of thirty-five (35) fully licensed and operational commercial banks in Ghana as per the (Bank of Ghana Report, 2021). Forty-eight (48) respondents were purposively selected for this study comprising of Managing Director, Head of Retail Banking, Head of Operations, Head of Risk Management, Head of Conduct and Compliance, Head, Internal Audit, Head, Financial Control and Strategy, Head of Information Technology, Head of Internal Control, and Head of Treasury. Principal Component Analysis (PCA) was used to identify the principal risk-based audit practices that add value to shareholders. Both linear and multiple regression models were employed to test the relationship between risk-based audit practices (RBAP) and value based financial performance of the listed banks in Ghana. The study established that risk management has a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. The study also revealed that annual risk-based planning has a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. The study also confirmed that internal audit capacity has a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. Lastly, the study found that internal auditing standards have a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. As such the null hypothesis that risk base financial audit has a significant positive effect on value-based financial performance was accepted. The study concluded that there was a significant positive relationship between risk based financial audit and value-based financial performance. it is recommended that a similar study be conducted on all financial and non-financial institutions that trade on Ghana Stock Exchange to facilitate comparison and allow for the generalization of findings on the effect of risk-based audits on shareholder value. The research recommends that other researchers should explore more about the influence of non-financial related factors and their implication on shareholder value in the Ghanaian Banking Sector.

An Assessment Of Mobile Money Service Adoption In Ghana

Mobile money in Ghana has opened diverse opportunities in the financial sector and has become the catalyst in financial inclusion in emerging economies. The study adopted the survey methodology and limited to the two commercial banks in Ghana (to be identified as Bank A and Bank B), with a sampling size of 188 using the convenience sampling technique. The findings revealed consumer demands for mobile cash services are varied activities like withdrawing of cash among others, as it remains key reasons for the adoption of mobile money service in banks. Furthermore, stakeholders in mobile money and providers of mobile money considers customers' intent to use mobile money and its associated challenges to improve its use and encourage its general acceptance within the banking sector. The study suggests that, to boost growth and adoption, it is imperative to have guidelines that supports the ease and usefulness of mobile money service adoption.

Factors Influencing the Effectiveness of Internal Control Systems: A Case Study of Commercial Banks in Ghana

This study examines the factors influencing the effectiveness of internal control systems in the banking industry in Ghana. The study adopted the quantitative approach using the survey design to obtain data from 130 participants from selected Commercial banks in Ghana. For data analysis, Statistical Package for the Social Sciences (SPSS version 24) was utilized. A number of descriptive statistical tests and in a combination of Exploration Factor Analysis (EFA) and Confirmation Factor Analysis (CFA) was used. The statistical tools used include mean, standard deviation, frequency and Ordinary Least squares (OLS) regression. The study found critical factors driving Internal Control system (ICS) within the banking sector in Ghana to include the environment control, risk assessment, control activities, information communication technology (ICT), and monitoring activities. The study discovered that some of the ways required to improve ICS include consistent revision of policies and procedures as well as provision of adequate training and communication on ICS to staff. It is also recommended that employees should be involved in the development of control mechanisms to make them own the system which will promote its enforcement to influence operational efficiency.