Ghana: Total assets of banks hit GHS 200bn at end-June 2022
Total assets of all 23 banks in the country amounted to GHS 200bn at the end of June this year.
According to the Central Bank in its 107th Monetary Policy Committee (MPC) press briefing on Monday, July 23, 2022, total banking assets grew by 22.8 percent on a year-on-year basis compared to the growth of 17.2 percent in the previous year.
Aside the rise in the industry’s assets, other key Financial Soundness Indicators of the banking industry remained positive.
The Capital Adequacy Ratio was 19.4 percent in June 2022, well above the regulatory minimum of 13.0 percent. Core liquid assets to short-term liabilities improved to 30.2 percent, compared with 27.5 percent in the previous year.
Non-performing loans ratio also improved to 14.1 percent at end-June 2022 compared with 17.0 percent in June 2021, reflecting some moderation in the growth of the stock of non-performing loans, as well as the rebound in credit growth.
The banking sector’s profit before tax was GH¢4.4 billion, representing 21.6 percent annual growth in June 2022, compared to 32.1 percent in the previous year. Net interest income grew at 12.4 percent, compared with 19.4 percent a year ago.
Net fees and commissions, however, grew by 29.2 percent, compared to 19.6 percent in the previous year, reflecting a rebound in trade finance related business. These developments culminated in a 23.0 percent growth in operating income, compared with a growth of 15.7 percent in the corresponding year.
Operating expenses also recorded a higher growth of 22.9 percent, compared to 7.3 percent in the previous year, moderating the growth in profit before tax during the first half of 2022.
Meanwhile, credit to the private sector is recovering to the pre-pandemic levels, reflecting commercial banks’ portfolio rebalancing. In year-on-year terms, private sector credit increased significantly by 33.7 percent in June 2022, compared with 6.8 percent in the same period of 2021.
In spite of the sustained price pressures, private sector credit, in real terms, recorded a 3.0 percent growth. A year ago in June 2021, real private sector credit had contracted by 0.97 percent.
The latest credit conditions survey of banks revealed tightened credit stance on loans to enterprises and households. Notwithstanding these tight credit conditions across the industry, banks’ credit extension improved during the review period.
New advances to the economy broadened across the industry, with 20 out of 23 banks extending new credit. Total new advances as of June 2022 was GH¢24.6 billion (54.0 percent year-on-year growth), compared to GH¢15.9 billion (1.0 percent growth) recorded for the same period of 2021.
Total deposits however, grew at a slower pace by 19.1 percent to GH¢131.3 billion, relative to 22.5 percent growth a year earlier.
