The Governor of the Bank of Sierra Leone Sheku Samdadeen Sesay has hailed the significant jump in profits made in the banking industry in the country in 2010 saying that the figures signal “an economic turnaround”.
In 2009 the 13 commercial banks operating in the country posted a profit of 5.7 billion Leones (Le5,789,522) and in 2010 the profits practically skyrocketed to 31.8 billion Leones (Le31,860,596) which is a 393% jump.
This does not mean that it was plain sailing for all the banks as only 5 made profits in 2009 while the majority eight (8) recorded losses. In 2010 however an additional two (2) banks made profit bringing the number to seven (7) banks which recorded profits while six (6) made losses.
The top seven banks posted a 2010 after tax profit of 57.9 billion Leones (Le57,904,038) which was weighed down by significant losses of 26 billion Leones (Le26,043,442) by the other six banks. This dropped the after tax profits for the industry to 31.8 billion Leones (Le31,860,596).
Commenting on the 2010 performance, Governor Sambadeen Sesay said “the outlook seems to be bright and may be brighter”.
He attributed the growth in profits in the industry and the economy at large to be “driven mainly by mining and agriculture” which have received massive inputs of funds from both government and the private sector. He added that “the improved supply of electricity, investment in infrastructure and mineral projections of revenue” may have helped also.
Governor Sesay noted that “definitely there is recovery.”
Despite the wonderful after tax profits, not all the banks have published their audited accounts for 2010. Questioned why this is so, Governor Sesay explained that all the commercial banks are supposed to submit their audited accounts to the Central bank by the 30th march every year. After that he said the Central bank studies the figures and gives them a “no objection” after which they can now go ahead and publish in at least one daily newspaper.
Questioned further why three banks have still not published, the Central Bank Governor explained that because of the losses that the banks made they were unable to meet the required reserve capital of 18 billion Leones. As a result the defaulting banks made arrangements to bring in additional capital “which they have done.”
Governor Sesay stated that “Our interest is to ensure that we have a sound system that offers services to our country”.