Banking Industry Deposits Rise by 31.1% to GHS 245.9 Billion in June 2024, Slower Growth Compared to 2023
The Bank of Ghana’s July Monetary Policy Report reveals a 31.1% year-on-year increase in total banking sector deposits, reaching GH¢245.9 billion in June 2024.
This marks a deceleration from the 42.8% growth seen in June 2023, with the foreign currency component of deposits expanding by 29.8%, down from a 62.5% increase last year. The report attributes this slower growth to the depreciation of the Ghanaian cedi, which inflated the value of foreign currency holdings.
Deposits remain the primary funding source for the banking sector, accounting for 76.1% of total assets in June 2024, slightly down from 77.4% in the prior year. The banking industry’s asset growth continues to be heavily funded by these deposits.
Gross loans and advances grew by 15.6% to GH¢84.5 billion in June 2024, a marginal increase from the 15.4% growth seen in 2023. Net loan growth moderated to 10.3%, down from 11.3% during the same period last year, reflecting a cautious lending environment.
Borrowings showed a robust recovery, increasing by 44.4% to GH¢23.2 billion, following a 39.1% contraction in June 2023. This was driven by a sharp rise in short-term foreign and domestic borrowings, with short-term domestic borrowings surging by 83%, in stark contrast to the 33.6% contraction recorded last year.
However, long-term domestic borrowings contracted by 17.6%, reversing the 45.1% growth seen in 2023. Similarly, short-term foreign borrowings grew by 33.2%, while long-term foreign borrowings contracted by 2.5%, continuing the negative trend from the previous year.
The report underscores the shifting dynamics in Ghana’s banking sector, with asset growth increasingly reliant on deposits and a notable uptick in short-term borrowing amid a challenging economic environment.
