(Bloomberg) -- Ghanaian banks aren't recovering from the fallout of the coronavirus pandemic quite as well as the economy is.
Lenders are still way off profit levels reached before restrictions were introduced to curb the spread of Covid-19, according to data compiled by their Accra-based regulator for this year through October. West Africa's largest economy after Nigeria is rebounding faster than expected, with the central bank predicting 2% to 2.5% growth this year, compared with earlier estimates of 0.9%.
The following charts show how renewed optimism on the economy has yet to filter to banks:
An acceleration in return on equity, a measure of profitability, is being held back because banks haven't been able to boost lending, their main source of income, quick enough. Annual credit expansion slowed to 13.7% in October, the lowest since January 2019.
Banks are cautious with new loans because activity in industries such as trade, aviation and hospitality are still lagging behind, Edward Botchway, chief financial officer at Ecobank Ghana Ltd., said earlier this month.
While heading in the right direction, non-performing loans have also not yet declined to near the levels they were before the virus struck.
Additional spending to enable banks to do things differently than they would under normal circumstances, is keeping operational costs slightly above March's levels.
Those expenses include new platforms and computer systems to enable staff to work remotely and customers being able to access banking services, FBN Bank Ghana Ltd. Managing Director Victor Yaw Asante said in an interview. Lenders also needed to make arrangements to keep to safety protocols such as physical distancing, he said.
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