Non-performing loans and performance of commercial Banks in Ghana: a case of Unibank (gh) ltd.
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Date
2016-08
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KNUST
Abstract
Non-performing loans has been identified as one of the major risk facing financial
institutions all over the world. The banking sector in Ghana, in particular has been cited
as having high non-performing loan levels compared to other countries in SubSaharan
African (World Bank Annual report, 2015). Against this backdrop, the study examined
non-performing loans and how it relates to the performance of universal banks, using
uniBank (Gh.) Ltd as the case study bank. Both primary and secondary data was
collected and analyzed to meet the objectives of the study. Descriptive data analysis
was adopted to analyze both primary and secondary data. In addition, the responses
from the interview was transcribed and presented in a form that meets the objectives of
the study. The findings of the study show that even though the nonperforming loan of
the bank reduced from 7.6% in 2004 to 0.5% in 2010, it has been rising since 2011. The
study further discovered that the main causes of nonperforming loans include customer
business failure, inadequate collateral security, poor monitoring mechanisms and
inadequate loan appraisal. The study further found that non-performing loans
negatively affect the financial performance of Unibank Ghana. The study recommends
that the bank must adopt and adhere to effective credit granting standards in order to
minimize the level of non-performing loans.
Description
A Thesis Submitted To The Department Of Accounting And
Finance In Partial Fulfillment Of Requirement Of The Award Of The Degree Of Master Of Business Administration In (Finance)