This report covers developments in the Ghanaian banking sector as at the end of June 2018. The industry comprised thirty-four (34) licensed banks, seventeen (17) classified as domestically-controlled, while the remaining seventeen (17) were foreign-controlled.
Broadly, key financial soundness indicators improved moderately since the last MPC meeting, although some weaknesses remain. In particular, a significant portion of the banks’ loan books remained impaired.
The NPL ratio increased between June 2017 and June 2018 although the annual rate of growth of non-performing loans declined in June 2018.
Earnings from investments constituted the major source of income for the banks in June 2018. With the decline in revenue from loans, banks explored other income generating sources to make up for the shortfall.
There was a slight pickup in growth in outstanding credit balances over the last reported position (April 2018) although credit growth remained much lower than the June 2017 level.
The June 2018 Credit Conditions Survey round indicated net tightening on loans to enterprises while inflation and lending rate expectations eased marginally between the April and June 2018 survey rounds.
