Managing Director of Stanbic Alhassan Andani says the challenges that resulted in the banking sector clean up should not be described as a 'crises' because it has not caused a meltdown of the financial sector.

Speaking at the 3rd JoyBusiness Financial Services Forum, Mr Andani said, “What we have in Ghana is a credibility crisis which we are elevating to a banking crisis. If you use the credibility lens on any industry in this country, you are going to have the crisis that you see.”

He said, "There was not a single stoppage in the delivery of financial service in Ghana. The banks that were impacted controlled less than 10% of the loans and advances in this country."

Mr Andani added that the energy sector and the petroleum sector debts could have brought down systemic banks in the country and if “those two” had not been settled, the country could have “truly had banking crises.”

Clean up

Mr Andani added that the banking sector “cleanup is not really a function of the Bank of Ghana, so it’s the banks that are consistently suppose to clean up.”

Earlier, Mr Andani argued that the cleanup exercise by the regulator is a blessing to the customer as pruning the banking space of risky and overexposed financial institution gives the customer access to credible institutions.

These credible financial institutions which were not affected by the BOG’s reforms were even strong in the midst of the previous messy banking space, Mr Adani said.

But Mr Andani says that what happened in the banking “sector was expected. Industry players knew something like that was in the offing.”

He added “We saw the problems coming, it was clear that the industry was not in good shape. We knew from the Asset Quality review that there was a lot to be fixed but we did not. We knew but we were managing it.”

The 3rd JoyBusiness Financial Services Sector Forum was on the topic: ‘The Financial Services Sector Clean-up; Now What?'