Banks continue impressive performance

Banks continue impressive performance

Banks in the country continue to record impressive growth rates, with the latest banking sector report of the Bank of Ghana (BoG), indicating that banks profits, deposits, and assets all recorded strong growth in February 2020.

The report showed that banks recorded stronger annual growth in total assets in February 2020 compared with a year earlier.

Total assets of the banking sector amounted to GH¢128.33 billion in February 2020 representing a year-on-year growth of 17.8 per cent compared to 14.5 per cent recorded in February 2019.

The strong growth in total assets reflected in both domestic and foreign assets. The more pronounced growth of 18.7 per cent in domestic assets compared to the 8.2 per cent increase in foreign assets resulted in the share of domestic assets in total assets inching up from 91.5 per cent to 92.2 per cent over the period.

Rebound in credit growth

The strong growth in total assets was on the back of a rebound in credit growth. Gross loans and advances rose by 26.0 per cent to GH¢45.91 billion in February 2020, following a subdued growth of 1.9 per cent a year earlier.

Similarly, net loans and advances (that is, after adjusting gross loans for provisions and interest in suspense), grew by 27.2 per cent to GH¢40.47 billion against a marginal pick-up of 4.8 per cent in February 2019.

The rebound in credit growth underscores the positive impact of higher capital levels and sustained deposit growth in supporting intermediation.


Investments remained the largest component of banks’ assets but its contribution to growth in assets has waned.

Growth in investments, consisting of bills, securities, and equity slowed to 7.2 per cent in February 2020 from 33.3 per cent a year earlier.

The slower growth in total investments was partly a reflection of the base effects of the special (long-term) resolution bonds issued to Consolidated Bank Ghana (CBG), which increased the investment balance in February 2019.

In spite of these developments, total investments of GH¢46.57 billion remains the largest component of total assets at end-February 2020 but its share in total assets dipped from 39.9 per cent to 36.3 per cent during the period.


Banks’ profit outturn was stronger in the first two months of 2020, with a 38.8 per cent growth in profits in February 2020.

This was higher than the 31.5 per cent growth in the same period last year, because of significant increases in banks’ income, which outpaced the growth in operating expenses.


The industry continued to record strong and sustained growth in deposits, with total deposits growing by 15.6 per cent to GH¢83.10 billion as at end-February 2020 suggesting sustained confidence in the sector.

This compares with the 20.0 per cent deposit growth recorded a year earlier.

The report noted that the deposits continued to be mobilised mainly from the domestic economy, with a share of 99.6 per cent, while the share of deposits from non-residents remained negligible at 0.4 per cent.

Shareholders’ funds

Banks shareholders’ funds' position remained strong, with the higher capital base supported by increased profitability.

The stronger profit outturn boosted the reserves position of banks and led to an increase in the industry’s shareholders’ funds by 14.6 per cent to GH¢18.28 billion in February 2020.

The previous year’s growth of 18.0 per cent was because of the marked increases in the industry’s paid-up capital due to the recapitalisation exercise.

The BoG believes the strong capital and shareholders’ funds' positions would further strengthen the stability and resilience of the banking sector.

Overall, the central bank noted that the banking sector’s strong financial performance during the first two months of the year reflected continued positive dividends from the regulatory reforms.

Although this strong performance could continue, it said the ramifications of the on-going COVID- 19 pandemic poses a major risk to the industry’s operations and performance.

“It is however expected that the proactive policy measures (see Box 1) taken by the Bank of Ghana will help minimise the associated downside risks,” the report noted.