Investments constituted largest component of total assets of banks as of October 2023; hit ¢103.7bn – BoG
Investments constituted the largest component of the total assets of banks as of October 2023.
According to the Bank of Ghana’s November 2023 Monetary Policy Report, it was up by 22.0% year-on-year to ¢103.7 billion in October 2023, compared to 1.9% in October 2022.
However, banks’ holdings of long-term investments (securities) contracted by 25.5% in October 2023 from 20.9% growth in October 2022. This follows the completion of the Domestic Debt Exchange Programme (DDEP).
However, short-term investments or bills increased sharply by 285.8%, after contracting by 45.5% during the same reference period.
Consequently, the share of investments in total assets increased to 40.2% in October 2023, from 34.0% in October 2022.
Gross loans and advances contracted by 9.5% to ¢73.5 billion in October 2023 compared to the strong growth of 57.5% in October 2022.
Meanwhile, the total assets of the banking sector grew by 3.2% year-on-year to ¢257.9 billion as of October 2023, compared with 43.7% growth in October 2022.
Deposits remain main source of funding for banking sector
Also, deposits remained the main source of funding for the banking sector, accounting for 77.5% share of total assets in October 2023, up from 68.9% a year ago.
The growth in deposits, however, declined within the review period, partly reflecting the translation effects of the appreciation of the Ghana cedi in October 2023 relative to October 2022. Accordingly, total deposits grew by 16.2 percent year-on-year to ¢199.9 billion in October 2023, compared with 46.5% growth in the same period of last year.
The other sources of funding for the banking sector, namely, borrowings and shareholders’ funds recorded contractions in October 2023 relative to the same period last year.
For instance, the banking sector’s borrowings from domestic and external sources declined by 50.9% to ¢14.9 billion in October 2023, after increasing by 47.6% in October 2022.
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