Ghana

Enterprise Insurance LTD (Jul 2022)

Enterprise Insurance LTD was originally founded in 1924 as Royal Exchange Assurance Corporation, being the first insurance company operating in Ghana, and was subsequently renamed to Guardian Royal Exchange Assurance. The underwriter has been operating under the name Enterprise Insurance Company Limited since 1976 and was the first insurance company to list on the Ghana Stock Exchange in 1991. In August 2010, Enterprise Group Plc (“the group”), formerly Enterprise Group Limited, was established. The group housed insurance and related subsidiaries. Following the establishment of the group, the underwriter was de-listed from the local stock exchange, with the parent company listing in November 2010. In July 2021, Enterprise Insurance Company Limited changed its name to Enterprise Insurance LTD to comply with the naming requirements of the new Company’s Act (2019).

Enterprise Insurance is majority owned (75%) by the group with the remaining stake (25%) held by Black Star Holdings Limited, a private limited company registered in England and Wales. A stand-alone analytical approach was followed given the entity’s less than majority revenue and asset contribution to the group, which stood at 33% and 17% at FY21, respectively.

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Ghana’s 5% Financial Sector clean-up levy set to moderate bank profitability (April 2021)

Overview

The 2021 budget statement presented to the Ghanaian parliament on 12 March proposed the introduction of a financial sector clean-up levy of 5% of banks’ profit before tax, intended to help defray outstanding commitments in the sector. The levy will be reviewed in 2024.
Meanwhile, on 31 March 2021, the Ghanaian president signed into law five other taxation laws and amendments affecting the general economy which were in-line with various measures introduced by the Government of Ghana in the 2021 Budget to rebuild Ghana’s public finances.
GCR believes, Ghanaian banks are well-positioned to absorb the initial impact of the increased tax cost from the 5% Financial Sector clean-up levy. However, increased asset quality risk from borrowers further pressured by the new tax initiatives in addition to the economic effects of the coronavirus pandemic may strain the financial sector. Return on Assets (after tax) was 2.8% at December 2020, we forecast a moderation to 2.6% at 31 December 2021.

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Letshego Ghana Savings and Loans PLC – October 2021

Letshego Ghana Savings and Loans PLC (“Letshego Ghana”, “the company”) rebranded in September 2019 from AFB Ghana Plc (“AFB Ghana”) after acquisition by Letshego Holdings Limited (“LHL”). The company began operating in 2009 as a non-bank financial institution (“NBFI”), providing unsecured consumer finance to the under-banked market (i.e., small/micro businesses and individuals).

The analytical approach is based on a mixture of the bank’s standalone credit analysis and Group support characteristics. Letshego Ghana is wholly owned by LHL which is headquartered and listed in Botswana delivering finance solutions to populations across 11 Sub Saharan Markets. The Group does not operate as one holistic operating structure as the group’s entities are largely operationally self-sufficient, and there is no cross-default clauses or large direct credit linkages.

The company operated exclusively in Ghana, through approximately 27 deposit-taking branches and over 194 employees at 31 December 2020. Principal financial solutions are deduction at source (“DAS”) payroll loans.

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