Bank of Ghana report has shown that the rate in commercial banks’ deposits slowed down in 2019.
According to the central bank, despite the various reforms it undertook to strengthen the sector, banks in the country still recorded a slow performance.
BoG said this in its latest banking sector report for 2019.
BoG stated that deposits, as the main source of funding for the banking industry, grew by 17.1 percent in October 2019, marginally lower than the 20.7 percent increase in the previous year.
The total banking sector deposits increased to GH¢78.90 billion by GH¢11.51 billion in October 2019 from GH¢67.38 billion in October 2018. Despite the slowdown in growth rate, the Bank of Ghana maintains that the sheer growth points to a renewed confidence in the banking sector following the reforms.
The report further said domestic deposits grew at the same pace as total deposits to GH¢78.50 billion in October 2019 from GH¢67.04 billion in the previous year, while deposits of non-residents remained small at GH¢397.70 million from GH¢342.10 million.
The foreign currency component (denominated in Ghana Cedis) of total deposits, on the other hand, recorded a higher growth of 22.4 percent in October 2019 to GH¢20.79 billion compared with a growth of 13.7 percent a year ago.
In the report, as of October 2019, banks in the country made a total profit of GHS2.83 billion which was a 45.3 percent increase in the figure recorded same period in 2018.
This is attributed to the increase in profitability in the banking sector to the reforms it implemented over the last two years.
“The industry’s balance sheet posted a strong performance reflected by robust growth in total assets funded by sustained growth in deposits and increased capital levels relative to last year. Similarly, the industry’s income statement recorded an impressive year-on-year increase in profit-after-tax on the back of stronger growth in revenue lines compared to operating expenses,” the report said.
Adding that “Private sector credit growth rebounded during the period under review, enhancing financial intermediation.”
In general, banks’ total assets grew by more than 13 percent to GH¢121 billion in October 2019.
Of this, the stock of domestic assets increased by over 16 percent to GH¢111.5 billion in October 2019, while foreign assets reduced by 7.7 percent from the reduction in banks’ placements abroad.
Domestic assets remained the largest component in total assets with the share increasing to 92.2 percent in October 2019.
Deposits, the main source of funding for the banking industry, grew by 17.1 percent in October 2019, marginally lower than the 20.7 percent increase in the previous year.
Total banking sector deposits increased to GH¢78.9 billion in October 2019 which the Bank of Ghana believes is due to the renewed confidence in the banking sector following the reforms.