On the finish of December 2020, whole belongings of the banking sector stood at GH¢149.3 billion, representing a progress of 15.7 per cent in comparison with 22.8 per cent at end-December 2019.
That is towards GH¢128.98 billion recorded at end-December 2019 with the slower progress in belongings in 2020 reflecting the antagonistic results of the COVID-19 pandemic on the sector.
The Financial institution of Ghana’s Annual Report and Monetary Statements for 2020 stated developments within the 12 months underneath overview have been on account of weaker progress in each home and overseas belongings of 15.7 per cent and 17.0 per cent, respectively, in comparison with 23.0 per cent and 19.8 per cent progress in 2019.
The report stated the banking sector continued to be the dominant sector with 23 banks, controlling 91.1 per cent of the full belongings of the business.
It stated asset progress was primarily pushed by a rise in deposits, which grew by 24.4 per cent to GH¢103.8 billion at end-December 2020, marginally larger than the 22.2 per cent progress recorded a 12 months earlier.
The report stated deposit progress was supported by a rise in financial savings by people and corporations towards the final slowdown in client and funding spending in some sectors because of the pandemic.
“Shareholders’ funds grew by 20.8 per cent to GH¢21.2 billion at end-December 2020, in contrast with a 19.7 per cent at end-December 2019,” it stated.
The report stated the steady progress in shareholders’ funds bolstered the steadiness and resilience of the banking sector throughout the overview 12 months.
Complete borrowings at end-December 2020 contracted was 29.0 per cent as towards 37.9 per cent progress at end-December 2019, on account of the robust progress in deposits and shareholders’ funds, amid the slower credit score progress.
The report stated the decline in borrowings mirrored primarily in short-term borrowings, whereas long-term borrowings elevated throughout the 12 months.
It stated in sum, the banking sector on the end-December 2020 was strong regardless of the pandemic-induced financial slowdown encountered within the 12 months.
On the Monetary Soundness Indicators, the report stated in 2020, regulatory assist measures and robust profitability progress of the banking sector strengthened monetary soundness indicators, reminiscent of liquidity, solvency and effectivity.
The report stated profitability of the DMBs elevated at end-December 2020 over the earlier 12 months’s place, as highlighted by the important thing profitability indicators.
On the asset high quality, it stated the Non-performing Mortgage (NPL) ratio inched as much as 14.8 per cent at end-December 2020, from 13.9 per cent at end-December 2019.
The deterioration in asset high quality in 2020 was as a result of pandemic-induced mortgage reimbursement challenges, and a slowdown in credit score progress.
It stated the full excellent loans restructured by banks as at December 2020 amounted to GH¢4.5 billion, representing 9.4 per cent of the business mortgage ebook.
Within the space of liquidity, the report stated in 2020, the banking sector remained liquid.
The ratio of broad liquid belongings to whole belongings elevated to 64.1 per cent in 2020, from 61.1 per cent in 2019, on the again of elevated banks’ holdings of long-term devices (securities).
It stated the ratio of broad liquid belongings to whole deposits, nonetheless, declined to 89.0 % at end-December 2020, from 92.1 per cent at end-December 2019.
The report stated investments in payments, securities, and equities elevated by 33.0 % in 2020, in contrast with an annual progress of 26.9 per cent in 2019.
“Investments remained the biggest part of whole belongings, with its share growing to 43.2 %, from 37.6 per cent in 2019. Within the overview 12 months, gross loans and advances grew by 5.8 % to GH¢47.8 billion from GH¢45.2 billion at end-December 2019,” it stated.
The brand new loans and advances in 2020 amounted to GH¢34.4 billion, 15.8 % larger than the GH¢29.7 billion recorded within the earlier 12 months.
Nevertheless, credit score progress was decrease in 2020 as in comparison with 2019 due partly to weak credit score demand and in addition elevated repayments, the report stated.
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