Ghana: Banking Industry Remains Strong, Profitable Despite Macroeconomic Challenges – Dr Addison

The banking industry remains strong and profitable in spite of the difficult macroeconomic environment, the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said.

He said the total assets of the industry as of October 2022, grew to GH¢249.9 billion, representing an annual growth of 43.7 percent as of October 2022.

“Underpinning the growth in assets was sustained growth in deposits and borrowings, as well as the revaluation effect of the foreign currency component of key balance sheet indicators, Dr Addison, said at a press conference after the 109th Monetary Policy Committee (MPC) meeting in Accra.

Dr Addison who is the Chairman of the MPC said total deposits rose to GH¢172.1 billion in the period under review, representing an annual growth of 46.5 percent, compared with 17.2 percent during the same period in last year.”

He said borrowings increased from GH¢20.6 billion to GH¢30.4 billion representing an increase of 47.6 per cent, and that total investment also increased to GH¢85.0 billion in October 2022, compared with a growth of 25.5 percent during the same period last year.

“Gross advances, on the other hand, increased sharply to GH¢81.2 billion representing 57.5 percent, relative to GH¢51.6billion in October 2021.

The industry’s Capital Adequacy Ratio (CAR) was 14.2 percent as at October 2022, above the prudential minimum of 13.0 percent, but shows a sharp decline from 19.8 percent recorded a year earlier,” Dr Addison said.

He added that profit-after-tax for the first 10 months of 2022 was GH¢4.4 billion, representing an increase of 17.2 percent as compared with 10.0 percent growth during the same period last year.

“Net interest income grew by 22.7 percent to GH¢12.8 billion, higher than the 15.2 percent growth. Net fees and commissions also grew by 25.4 percent to GH¢2.9 billion, compared with 22.9 percent growth over the same comparative period. Operating income accordingly rose by 27.0 percent, higher than the corresponding growth of 14.3 percent in 2021 on the back of the current challenging operating environment,” Dr Addison, said.

The Governor said the Non-Performing Loans (NPL) ratio improved from 16.4 percent in October 2021 to 14.0 percent in October 2022, on account of the higher growth in credit relative to the increase in the NPL stock.