Bank of Ghana Outlines Critical Actions for Banking Sector’s Medium-Term Performance
Recapitalisation, Stringent Credit Underwriting Standards, and Intensified Loan Recovery Efforts Key to Sector's Success
The Bank of Ghana (BoG) has identified several critical actions that are needed to ensure good performance of the country’s banking sector in the medium term. These include recapitalisation, enforcement of stringent credit underwriting standards, and intensified loan recovery efforts. This is despite the fact that the outlook of the sector remains stable, according to the central bank’s Monetary Policy Report for the first half of the year.
The banking sector remained profitable, liquid, and generally efficient during the review period, with stable solvency reflecting the rebound in profitability in the industry post-Domestic Debt Exchange Programme (DDEP) implementation, as well as the ongoing recapitalisation effort by banks.
The banking sector’s balance sheet performance in the first half of 2024 was characterized by a significant growth in total assets, driven by a robust growth in deposits and the depreciation of the Ghana cedi. Foreign assets grew by 57.6% in June 2024, compared to 74.5% in June 2023, while domestic assets grew by 31.0% in June 2024, up from 17.8% growth same period last year.
The report revealed that investments grew by 19.2% to GH¢107.2 billion in June 2024, up from a growth of 11.0% in June 2023, due to significant growth in both short-term and long-term instruments. Gross loans and advances rose by 15.6% to GH¢84.5 billion in June 2024, relative to a 15.4% growth in June 2023.
