Banking: Industry’s assets value jumps to GHS 221bn
Total assets value of the banking industry increased to GH¢221 billion in December 2022, representing an annual growth of 22.9%.
This compares favourably to a growth of 20.4% a year earlier.
Total deposits ended the year at GH¢157.9 billion, representing an increase of 30.4 percent in 2022, relative to a growth of 16.6 percent in 2021.
Credit continued to increase, recording a growth of 30.2 percent to GH¢70.0 billion from GH¢53.8 billion in December 2021.
Total investments, on the other hand, contracted by 4.8 percent to GH¢79.2 billion in December 2022, relative to a 29% annual growth in 2021, as banks rebalanced asset portfolios in response to the Domestic Debt Exchange Programme.
Despite the increase in assets value, banks witnessed a dip in their profitability as a result of the mark-to-market losses on investments, higher impairments on loans, and rising operating costs.
According to the Central Bank in its Monetary Poicy Committee press statement issued Monday, January 30, 2023, profit-after-tax of banks was GH¢3.9 billion at end December 2022, representing 18.9 percent contraction year-on-year when compared to 12.3 percent annual growth recorded in 2021.
Net interest income however, grew by 23.0 percent to GH¢15.8 billion, higher than the growth of 14.5 percent in 2021. Net fees and commissions also went up by 27.4 percent to GH¢3.7 billion, from the growth of 24.8 percent recorded in 2021.
Accordingly, operating income increased by 30.9 percent, compared with 14.6 percent recorded a year earlier. The strong outturn in operating income was however moderated by increased operating expenses and provisioning during the year.
Operating expenses rose by 32.2 percent in December 2022, compared with 14.2 percent growth in 2021. Provisions also increased sharply by 184.0 percent in December 2022 relative to a contraction of 4.7 percent a year earlier, due to the strong uptick in credit growth, elevated credit risks, and impairments on investments.
As a result, profit before tax declined by 13.5 percent to GH¢6.4 billion in December 2022, compared with an
annual growth of 22.1 percent a year earlier.
