Owing to the increasing levels of non-performing loans in the banking sector, fund managers have been cautioned against purchasing banking stocks.

According to the Chairman of the IFS capital management limited, Mr. Samuel Kwadjo Agyapong Appenteng, returns on banking stocks keeps dwindling, adding that debtors are not honouring their debt obligations which makes banking stocks risky.

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“You know historically the banks were quite a juicy area,” he told Citi FM. “But the way the economy has performed over the last couple of years or so, you’d find that banks are having a huge NPLs [Non Performing Loans] which means that their performances is beginning to have challenges.”

He continued: “Debtors are not really honouring their obligations so it is an area we find risky at this point.”

He was however optimistic the situation will improve with time.