IV. Conclusion
To conclude this study, we can say that the assessment
of the whole problem loans
management practices of Ecobank Ghana Limited showed that:
- the Bank's credit risk management processes are
complying with the international standards
- the workout strategies for problem loans are satisfactory
Nonetheless, we noted that strategies to sort out some problem
loans often took long times.
The recommendations we made are mostly based on the
credit risk management processes and authors agree that sound risk
management processes can lower loan losses.
This shows the importance of having a clear credit policy and
procedure manual that should
be available and very well understood by any employee of the
bank.
The Board of the bank should have an oversight of the
risk management and it (the risk management) should be integrated in a
day-to-day decision making.
The insistence on the role of the risk management system in
problem loans management may discourage some banks in taking risks. But this
should not.
As aforesaid in the introduction, risk is inherent to banking
particularly lending activities.
The CEO of one Fortune 500 corporation, asked to explain
his company's declining performance, fingered the "lack of a culture of risk
taking".
The issue is not to avoid taking risks but to develop a series
of controls and `checkpoints' to evaluate accurately the level of risk to
be taken and how bearable it is for the bank. Measurements of
performance should no more be limited to traditional accounting measures
but should integrate `risk-adjusted' components.
47 MBA in Banking and Finance
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