Ghana’s Total Banking Assets Hit GH¢106.3 Billion - African Eye Report | African Eye Report

Ghana’s Total Banking Assets Hit GH¢106.3 Billion

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Accra, Ghana, November 27, 2018//-Total assets of banks operating in Ghana have expanded significantly at the time that the Ghanaian economy is reported to be stabilising.

The banking industry’s total assets increased to GH¢106.3 billion in October 2018, representing a year-on-year growth of 19.6 percent, according to the Governor of Bank of Ghana (BoG), Dr Ernest Addison.

Of the total assets, advances and investments constituted 33.4 percent and 40.3 percent respectively, he added.

The latest Financial Sector Indicators (FSIs) show that the banking system remains solvent, sound and profitable.

Dr Addison continued: “The industry’s solvency, measured by the Capital Adequacy Ratio (CAR), improved to 20.0 percent in October 2018 from 18.0 percent in the same period of last year, well-above the prudential requirement of 10.0 percent.

Asset quality has also improved marginally, indicated by the decline in the nonperforming loan (NPL) ratio to 20.1 percent in October 2018 from 21.6 percent in October 2017”.

Meanwhile, the latest credit conditions survey shows an easing of credit stance with increases in banks’ credit and loans to both households and enterprises as banks continue to strengthen their balance sheet and the deadline for meeting the minimum capital approaches.

As a result, private sector credit has continued to recover, but at a moderate pace. Private sector credit grew by 11.4 percent in October 2018 compared with a growth of 14.9 percent in October 2017.

In real terms, private sector credit expanded by 1.7 percent compared with 2.9 percent over the same period in 2017.

There have been marginal increases in money market interest rates across the maturity spectrum. In October 2018, the 91-day Treasury bill rate increased to 13.6 percent from 13.3 percent a year ago.

Similarly, the 182-day instrument increased to 14.4 percent from 13.8 percent. Rates on the secondary bond market also increased, reflecting tight financing conditions.

The yields on the 7-year, 10-year and 15-year bonds all edged up to 19.3, 19.3 and 19.5 percent in October 2018 from 17.5, 17.4 and 17.9 percent respectively, in October 2017.

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