Struggle With Elevated NPLs Continue as Banking Industry Assets Hit GHS 367 Billion Valuation
The banking sector, according to the Bank of Ghana, continued to record improvements in performance with total assets growing by 42.4 percent to GHS 367.2 billion at end-October 2024, compared to 3.2 percent at end-October 2023.
This is despite an elevated non-performing loans (NPL) profile of the banking sector with the NPL ratio rising to 22.7 percent end-October 2024 from 18.3 percent at end-October 2023.
The banking sector has over the last two years struggled to reduce NPLs to the pre-DDEP level of 14 percent.
For this year in particular, the sector has struggled to reduce NPLs to below 20 percent, with the sector’s NPL ratio hovering between 22.7 percent and 26.7 percent since January.
According to the Central Bank, growth in the industry’s asset value was driven primarily by increments in total deposits by customers.
Total deposits at end-October 2024 stood at GHS 277.3 billion from the GHS 199.9 billion total deposits recorded same period last year, marking a 38.7 percent year-on-year increase in deposits.
Total advances (loans) made to businesses and households within the review period also amounted to GHS 94.6bn at end-October 2024, marking a 28.8 percent year-on-year growth when compared to the GHS 73.5 billion total advances recorded in October 2023.
“Growth in private sector credit increased to 28.8 percent in October 2024 from negative 7.5 percent recorded in the corresponding period of 2023. In real terms, credit to the private sector increased by 5.5 percent relative to a 31.6 percent contraction, recorded over the same comparative period,” said the BoG.
