Banking industry assets rise by 22.9% to reach GHS 204bn at end-August 2022 – BoG
The banking sector has remained resilient for the past eight months of the year, as the industry’s total assets value at end-August 2022, increased by 22.9 percent on year-on-year basis to GH¢204.6 billion.
This compares favourably to the 16.7 percent annual growth recorded in the previous year.
The rise in assets, the BoG notes, was due to sustained growth in deposits. Total deposits increased by 22.5 percent to GH¢136.7 billion, relative to 21.8 percent growth in August 2021.
The key Financial Soundness Indicators (FSIs) of the banking industry have remained positive in the year, with Capital Adequacy Ratio at 18.1 percent, well above the regulatory minimum of 13.0 percent.
The sector was also liquid, reflected by an increase in the core liquid assets to short-term liabilities to 31.1 percent in August 2022 from 24.7 percent in the previous year.
Asset quality also improved as the Non-Performing Loans ratio declined to 14.3 percent at end-August 2022, from 17.3 percent in August 2021, reflecting partly, the higher level of outstanding loans.
GHS 6.1bn profit before tax
Profit before tax for banks stood at GH¢6.1 billion in August 2022, representing an annual growth of 25.2 percent, compared to 27.4 percent in the previous year. Net
interest income grew by 17.3 percent, compared to 17.9 percent.
Net fees and commissions also increased by 26.9 percent to GH¢2.3 billion, compared with 21.8 percent growth in the previous year, reflecting the rebound in credit growth as well as an increase in trade finance-related business.
Other income of banks grew by 85.6 percent to GH¢2.0 billion, compared with a contraction of 5.4 percent a year ago. These developments resulted in a 25.5 percent growth in operating income to GH¢14.2 billion, relative to a growth of 15.7 percent in the previous year.
Operating expenses, however, increased sharply by 24.3 percent in August 2022, compared to 9.0 percent growth in August 2021, partly reflecting the impact of inflation on banks’ operations.
Credit conditions
The latest credit conditions survey conducted in August 2022 indicated an overall net tightening of credit stance to corporates and households by the commercial banks.
This was reflected in the steady increase in average lending rates. This notwithstanding, new advances increased by 56.1 percent year-on-year to GH¢33.8 billion in August 2022, relative to a 4.9 percent increase in August 2021.
Annual growth in private sector credit was 35.8 percent in August 2022, compared with 9.6 percent a year ago. In real terms, private sector credit increased, albeit marginally, to 1.4 percent due to sustained price pressures. This compares with a contraction of 0.2 percent over the same period in 2021.
