This report covers developments in Ghana’s banking sector as at December 2018 compared with the same period last year. The data for the analysis is based on the thirty (30) banks operating during December 2018.
Banking sector assets in December 2018 grew by 14.7 percent to GH¢107.34 billion, up from 13.3 percent a year ago. The growth in assets was funded mainly by deposits and increases in paid-up capital from the recapitalization exercise.
Total loans and advances (including loans of the 5 defunct banks transferred to the Receiver) were up by 12.9 percent to GH¢42.7 billion as at end of December 2018.
Domestic gross loans (excluding the loans of the 5 defunct banks) however contracted by 3.5 percent to GH¢36.50 billion in the review period.
Profitability of the banking sector remains strong although the industry’s net profit after tax moderated in 2018 compared with 2017. Key financial soundness indicators also improved.
The industry’s capital adequacy ratio (CAR) was higher at 21.9 percent at year-end 2018, significantly above the prudential requirement of 10 percent. Liquidity was adequate with notable improvements in both core and broad operational liquidity measures.
Asset quality was enhanced with the Non-Performing Loan (NPL) ratio declining to 18.2 percent in December 2018 from 21.6 percent a year earlier, largely as a result of enforcement of Bank of Ghana’s loan loss write-off policy.
Based on the findings from the latest stress tests, the banking sector was robust and resilient in December 2018 compared to December 2017.