Assets of banks hit GH¢152bn while deposits rise to GH¢104bn-BoG

Banks in Ghana have reported impressive growth numbers in total assets, deposits and investments for 2020, defying the devastating impact of the COVID-19 pandemic.

According to figures from the Bank of Ghana (BoG), total assets increased by 18.5 % on a year-on-year basis to GH¢152 billion, reflecting strong growth in investments in government securities by 45.9% to GH¢67.9 billion.
The data, released on the back of the announcement of the bank’s policy rate (maintained at 14.5%), revealed total deposits recording a year-on-year growth of 25.1% to GH¢104 billion.
“This reflects strong liquidity flows emanating from the COVID-19 fiscal stimulus, payments to contractors, SDI depositors, and clients of SEC-licensed fund managers,” the BoG stated.
Governor of the Bank and Chairman of the Monetary Policy Committee (MPC), Dr Ernest Addison noted that, “Overall, the impact of the pandemic on the industry’s performance seems moderate as banks remained liquid, profitable and well capitalised.”

GH¢4.7 billion in new advances
Notwithstanding the sluggish credit demand and supply conditions due to the pandemic, the COVID-related regulatory reliefs and policy measures continue to support lending activities, with new advances for the first two months in 2021 totalling GH¢4.7 billion.

NPLs up
Non-Performing Loans (NPL) ratio increased from 13.8% in February 2020 to 15.3% in February 2021, arising partly from the general pandemic-induced repayment challenges, as well as some bank-specific loan recovery challenges.
“In the latest Credit Conditions Survey, banks expect an increase in demand for credit and are signalling an ease in credit stance over the next two months,” the regulator said.
Dr Addison assured that “the banking sector remains well-positioned to continue with the core objective of financial intermediation to support the ongoing recovery process.”

Banks, the Governor noted, were projected to sustain the strong performance under mild to moderate stress conditions.
According to him, “While some of the regulatory reliefs extended to the industry have helped banks’ continued support of the real sector, close monitoring and heightened supervision will be required to address potential vulnerabilities in the industry, as the pandemic lingers.”

COVID-19 vaccination to boost return to growth
Although business and consumer sentiments softened on the back of the surge in COVID cases in the early months of 2021, the rollout of the vaccination programme has increased optimism about the future and will further add a boost to the anticipated recovery in growth.
The BoG observed that even though private sector credit growth remained generally weak due to the pandemic, the rebound of input supplies evidenced by increased non-oil imports was expected to  support the ongoing rebound in economic activity.

Source: Finderonline