Ghana’s banking sector remains stable, liquid, and profitable – BoG Boss 

Ghana’s banking sector’s performance improved as adverse spillovers from the domestic debt restructuring and macroeconomic challenges receded, Governor of the Bank of Ghana (BoG) Dr Ernest Addison, has said.

As of the end of 2023, he said, the data shows that the banking sector remains stable, liquid, and profitable.

Profitability improved for the sector from the loss position recorded in the 2022 audited accounts, reflecting sustained increases in net interest income and fees and commissions, he stressed.

“The industry’s balance sheet was generally strong, underscored by increased assets in December 2023, funded largely by deposits. Key financial soundness indicators remained broadly positive with the Capital Adequacy Ratio (adjusted for reliefs) above the regulatory minimum, while liquidity and profitability ratios were higher in December 2023 compared to the same period last year. The Non-Performing Loan ratio, however, increased in 2023, because of general repayment challenges on the part of borrowers, reflecting the impact of general macroeconomic challenges encountered in 2022. The latest stress tests indicates that the sector remains stable on the back of the on-going recapitalisation process by shareholders alongside support from the Ghana Financial Stability Fund,” he said while addressing the 116th Monetary Policy Committee (MPC) press conference in Accra on Monday January 29. The Committee reduced the policy rate from 30 to 29 percent.

Dr Addison further stated that its latest surveys conducted in December 2023 showed a strong rebound in both consumer and business sentiments, reflective of the signs of recovery.

Consumer confidence, he said,  improved on account of easing inflationary pressures which led to optimism about future economic conditions.

downward at the short end of the yield curve. The 91-day and 182-day Treasury bill rates decreased to 29.49 percent and 31.70 percent respectively, in December 2023, from 35.48 percent and 36.23 percent respectively, in the corresponding period of 2022. Similarly, the rate on the 364-day instrument decreased to 32.97 percent in December 2023 from 36.06 percent in December 2022.

“The interbank weighted average rate remained well-aligned within the policy corridor by the end of 2023. The weighted average rate increased to 30.19 percent in December 2023 from 25.51 percent in December 2022, in line with the monetary policy rate and supported by adjustments made in the cash reserve ratio. The average lending rates of banks eased marginally to 33.75 percent in December 2023 from 35.58 percent a year earlier,” he said.

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