Bank Credit Risk Calculator

Calculate Bank Credit Risk Metrics

Enter financial statement data for 3 years to calculate key credit risk metrics for a Ghanaian bank. All monetary values in Ghanaian Cedi (GHS).

Income Statement Data

Description	Year 1 (GH¢'000)	Year 2 (GH¢'000)	Year 3 (GH¢'000)
Interest income
Interest expense
Net fee and commission
Net impairment loss on financial assets
Net trading income
Other operating income
Personnel expenses
Depreciation and amortization
Other operating expenses
Taxation
Profit after tax

Balance Sheet Data

Description	Year 1 (GH¢'000)	Year 2 (GH¢'000)	Year 3 (GH¢'000)
Cash and cash equivalents
Non-pledged trading Assets
Investment securities
Loans and advances to customers
Property, equipment and right-of-use assets
Other assets
Deposits from banks
Deposits from customers
Borrowings
Other liabilities
Total equity
Market Capitalization

Cash Flow Statement Data

Description	Year 1 (GH¢'000)	Year 2 (GH¢'000)	Year 3 (GH¢'000)
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities

Economic Data & Forecast Assumptions

Ghana Inflation Rate (%)

GHS Depreciation Rate (%)

Bank of Ghana Policy Rate (%)

GDP Growth Forecast (%)

Forecast Period (Years)

Understanding Bank Credit Risk Metrics

Credit risk metrics are essential tools for assessing a bank's financial stability and its exposure to potential loan defaults. These metrics provide insights into the bank's ability to manage lending risks, maintain solvency, and operate efficiently in the context of Ghana's economic environment. Below is a detailed explanation of the key metrics used in this calculator:

Provision for Credit Losses (PCL) Ratio: Measures the proportion of loans expected to default, calculated as the net impairment loss on financial assets divided by total loans to customers. A lower ratio indicates better loan quality and lower credit risk.
Net Interest Margin (NIM): Represents the profitability of the bank's lending activities, calculated as the difference between interest income and interest expense divided by earning assets. A higher NIM suggests stronger profitability from interest-generating activities.
Return on Assets (ROA): Indicates how efficiently a bank uses its assets to generate profit, calculated as net income divided by total assets. A higher ROA reflects better asset utilization.
Return on Equity (ROE): Measures the return generated on shareholders' equity, calculated as net income divided by total equity. A higher ROE indicates better profitability for shareholders.
Efficiency Ratio: Assesses operational efficiency by comparing non-interest expenses to operating income. A lower ratio indicates better cost management.
Leverage Ratio: Evaluates capital adequacy by comparing total equity to total assets. A higher ratio suggests a stronger capital buffer against potential losses.
Debt to Assets Ratio: Measures the proportion of assets financed by debt, calculated as total liabilities divided by total assets. A lower ratio indicates lower financial risk.
Loans to Deposits Ratio: Reflects liquidity risk by comparing loans to customers with customer deposits. A lower ratio suggests a more conservative lending approach, while a higher ratio may indicate aggressive lending practices.

These metrics, when analyzed together, provide a comprehensive view of a bank's credit risk profile, helping investors, analysts, and regulators assess its financial health and resilience to economic challenges, particularly in Ghana's unique economic context influenced by factors like inflation and currency depreciation.

Obtaining accurate financial data is critical for calculating credit risk metrics. Below are detailed steps to source the necessary data for Ghanaian banks:

Bank Financial Statements: Access the bank's annual reports, typically available on their official website under the investor relations section. These reports include income statements, balance sheets, and cash flow statements, which provide data for metrics like interest income, net income, total assets, and total equity.
Bank of Ghana Reports: The Bank of Ghana publishes financial stability reports and banking sector data, which include aggregated figures for loans, deposits, and impairment losses. Visit the Bank of Ghana's website for these reports.
Stock Exchange Data: For publicly listed banks, market capitalization and other financial metrics can be obtained from the Ghana Stock Exchange (GSE) website or financial data platforms like Bloomberg or Reuters.
Economic Data: Macroeconomic indicators such as inflation rate, currency depreciation rate, policy rate, and GDP growth forecasts are available from the Bank of Ghana, Ghana Statistical Service, or international organizations like the IMF and World Bank. Check their respective websites for the latest reports.
Regulatory Filings: Banks submit regulatory filings to the Bank of Ghana, which may include detailed breakdowns of loans, deposits, and provisions for credit losses. These can sometimes be accessed through formal requests or public disclosures.
Financial News and Analyst Reports: Local financial news outlets and analyst reports from firms like Databank or Stanbic Bank Ghana provide insights into bank performance and economic conditions, which can help contextualize the data.
Third-Party Databases: Platforms like S&P Global, Moody’s, or Fitch Ratings may provide credit risk data and ratings for major Ghanaian banks, though access may require a subscription.

Ensure all data is in Ghanaian Cedi (GHS) and corresponds to the correct year. Cross-check figures from multiple sources to ensure accuracy, and consult a financial advisor if you are unsure about interpreting the data.