The effect of credit management on profitability in ghanaian banks -the case of commercial banks in ghana

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This study aims to investigate the effect of credit management on the profitability of Ghanaian banks. Both descriptive and explanatory research design was used to investigate the relationship between variables. The population of the study consists of commercial banks operating in Ghana. Specifically, nine commercial banks listed on the Ghana Stock Exchange (GSE). Secondary data were extracted from the annual financial reports of the banks and the Bank of Ghana (BoG) database. Descriptive statistics were used to give a general overview of the data. The study's hypotheses were tested using a panel regression analysis (random effect model). The findings showed that non-performing loans have a negative significant effect on banks' profitability, however, provision of loan loss and loan-to-value have no significant effect on banks profitability. The findings also showed that the banks have to a greater extent adopted Basel Accords and other regulatory frameworks for credit risk management. It is recommended that the banks review and adjust provisioning procedures on a regular basis to appropriately represent anticipated credit losses.
A thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of the requirements for the award degree of Msc. Accounting and Finance