The total asset base of banks in Ghana increased to GH¢95.1 billion in February 2018, the governor of the Central Bank Dr. Ernest Addison has revealed.
That, he said, indicates an annual growth of 13.7 percent compared with the 15.3 percent recorded in December 2017.
“The asset growth was mainly funded by deposits which went up by 12.6 percent on a year-on-year basis,” Dr. Addison stated at a press conference Monday March 26.
“The industry’s average Capital Adequacy Ratio (CAR) improved to 19.2 percent in February 2018, reflecting efforts by banks to recapitalize,” he added.
Other financial soundness indicators, he said recorded some improvements although the quality of loan portfolio remains a concern with the Non-Performing Loans (NPLs) ratio remaining unchanged at 21.6 percent since December 2017 as banks continued to clean their balance sheets.
“However,” he explained “adjusting for loan loss provision, the NPLs ratio stood at 10.9 percent in February.”
Shake up in banking sector to promote stability
There has been some massive shakeups in the banking sector in recent times. The latest being the decision of the Central Bank to handover of the management of Unibank to audit KPMG to revive and stabilize it because its “capital adequacy ratio (CAR) has fallen below 50% of the required minimum of 10% (i.e. below 5%).”
KPMG is expected to under section 108 of Act 930, as the official administrator of Unibank to exercise a exercise a variety of powers to rehabilitate and return the bank to regulatory compliance within a period of six months, at the end of which the bank will be returned to private ownership and management,” a Bank of Ghana (BoG) statement announcing the development said.
In a bid to allay fears that the handing over Unibank to KMPG will trigger capital flight among indigenous banks, the governor said at Monday’s press conference that: “The ongoing regulatory reforms in the banking sector are to promote stability of the financial system and to properly position it to support the economic growth agenda.”
The banking sector as a whole, he said continues to be liquid, profitable and solvent with some modest gains in asset quality however, “there remain few vulnerabilities and the Bank of Ghana expects banks to continue to implement their recapitalization plans in line with the new minimum capital requirement.”
Source: Ghana/Starrfmonline.com/103.5FM
