Ghana’s Agricultural Bank Swings to Loss as Bad Loans Soarby
Agricultural Development Bank Ltd., the Ghanaian lender which earlier this year canceled what would’ve been the country’s largest initial public offering, swung to a loss as bad loans soared and lending stalled because it didn’t have enough capital.
The lender, 52 percent owned by the government and 48 percent by the central bank, recorded an after-tax loss of 79 million cedis ($20 million) in 2015, compared with a profit of 48 million cedis a year earlier, the Accra-based company said in its annual report. Net interest income fell to 181 million cedis from 208 million cedis, ADB said.
“The bank’s performance was hampered by inadequate capital to operate with,” Chairman Nana Soglo Alloh said in the report. “Challenges presented by credit management required further provisions to be made,” he said, referring to impairments, which increased 86 percent to 110 million cedis.
ADB rejected more than 99 percent of the 437.9 million cedis in bids received during an IPO that closed in March. While the bank said in August it will relaunch the share sale, no further announcements have been made.
Solomon Atefoe, a spokesman for ADB, didn’t answer calls seeking comment.