The country’s banking sector is churning out more profit following the regulator’s decision to introduce a number of reforms to strengthen the sector.
The Bank of Ghana’s latest banking sector report revealed that 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.
The regulator attributes this 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.
Private sector credit growth rebounded during the period under review, enhancing financial intermediation,” the Bank of Ghana commented in the report.
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.